REGIONAL DAILY

December 26, 2012

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.

MALAYSIA

Malaysia Daybreak | 8 September 2014

▌What’s on the Table…

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Ahmad Zaki Resources Bhd - A laggard and deep value play

AZRB fits squarely into the category of a smaller-cap pure contractor with decent order book growth and new recurring income assets, and that is hugely undervalued relative to its RNAV. Longer-term recovery prospects are underappreciated, in our view. AZRB is worth double its market value. AZRB is the concessionaire of the RM1.6bn EKVE whose DCF value is arguably almost equivalent to AZRB's market cap. Today, investors would be paying for its construction and oil & gas bunkering businesses, but getting its other assets for free. The stock trades at a massive 75% discount to its RNAV. A 50% RNAV discount implies 103% upside.

Felda Global Ventures - Explains rationale for APL

At FGV's recent analysts’ briefing, management provided more details of its proposed acquisitions of APL and biodiesel. We concur with the management's view that APL's estates have good output growth prospects due to their young age profile. However, we still feel the estates are pricey when compared to other estates transactions in Sarawak, and expect the acquisition to be earnings dilutive in the near term. FGV indicated that APL will only turn profitable in FY17. As such, we maintain our Reduce call and target price of RM3.69, based on a 20% discount to its SOP.

Plantations - Malaysia scraps CPO export tax for two months

We view Malaysia's decision to exempt CPO from export taxes in Sep and Oct as positive for CPO exports in the near term as the CPO export tax will be much lower compared to Indonesia's 9% for Sep 14. However, this is negative for Malaysian refiners as it will erode their competitiveness against Indonesia's refiners in September. This measure will help keep palm oil stocks manageable but may not be able to lift the current bearish sentiment engulfing the CPO market due to concerns over rising edible oil supply in the coming months. Furthermore, there is a possibility that Indonesia will cut its CPO tax rate to zero in Oct if CPO prices stay below US$750 per tonne. We retain our Neutral sector rating and preference for First Resources.

Economic Update - Jul exports continue to slow

Export growth moderated to 0.6% yoy in Jul (+7.9% in Jun), which was lower than our estimate (+5.0%) and market expectations (+6.4%). Nonetheless, this still marked the 13th consecutive month of expansion. The slowdown was due to last year's high base and a decline in E&E exports (-1.0% yoy vs. +5.5% in Jun), though partly offset by expansion of non-E&E exports (+1.5% vs. +9.1% in Jun). The slowdown could also be explained by the shorter working festive month. On a positive note, Jul recorded the smallest mom decline in exports in the past three months (-0.2% mom vs. -5.5% in Jun) and imports of intermediate goods remained encouraging (+2.6% yoy vs. +2.3% in Jun), presaging that export growth in the coming months will still be supported.

▌News of the Day…

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• The price of a cigarette pack of 20s will go up by RM1 to RM13 today

• E&O proposed 1-for-10 bonus issue and free 1-for-5 warrants

• Mah Sing expects to clinch RM1.5bn sales during two-month sales campaign

• GST stimulate demand for vehicles with the reduction of prices, says MAI

• Khazanah looking to divest its stake in Westports Holdings?

• US nonfarm payrolls increased 142,000 in Aug (212,000 in Jul)

Sources: CIMB. COMPANY REPORTS

Sources: CIMB. COMPANY REPORTS

Key Metrics

FBMKLCI Index

1,700

1,750

1,800

1,850

1,900

Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14

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FBMKLCI

1868.46 -0.75pts -0.04%Sep Futures Oct Futures

1858 - (-0.03% ) 1861 - (1.00% )———————————————————————————

Gainers Losers Unchanged507 304 333

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Turnover2710.06m shares / RM2255.279m

3m avg volume traded 2452.37m shares

3m avg value traded RM2128.01m———————————————————————————

Regional IndicesFBMKLCI FSSTI JCI SET HSI

1,868 3,342 5,217 1,584 25,240 ————————————————————————————————

Close % chg YTD % chg

FBMKLCI 1,868.46 (0.0) 0.1

FBM100 12,635.67 0.2 0.4

FBMSC 18,793.07 1.0 19.7

FBMMES 6,939.71 0.8 22.3

Dow Jones 17,137.36 0.4 3.4

NASDAQ 4,582.90 0.5 9.7

FSSTI 3,341.73 (0.1) 5.5

FTSE-100 6,855.10 (0.3) 1.6

SENSEX 27,026.70 (0.2) 27.7

Hang Seng 25,240.15 (0.2) 8.3

JCI 5,217.34 0.2 22.1

KOSPI 2,049.41 (0.3) 1.9

Nikkei 225 15,668.68 (0.0) (3.8)

PCOMP 7,263.58 0.8 23.3

SET 1,584.32 0.3 22.0

Shanghai 2,326.43 0.8 9.9

Taiwan 9,407.94 (0.2) 9.2————————————————————————————————

Close % chg Vol. (m)

PDZ HOLDINGS 0.340 19.3 204.6

SUMATEC 0.465 3.3 157.3

GLOBALTEC 0.105 0.0 134.7

EFFICIENT 0.325 10.2 107.8

TEK SENG 0.750 8.7 68.3

MARCO HOLDINGS 0.210 2.4 58.4

COMPUGATES 0.065 18.2 57.5

DAGANG 0.365 5.8 51.7————————————————————————————————

Close % chg

US$/Euro 1.2955 0.03

RM/US$ (Spot) 3.1825 (0.03)

RM/US$ (12-mth NDF) 3.2470 (0.42)

OPR (% ) 3.25 0.00

BLR (% , CIMB Bank) 6.85 0.00

GOLD ( US$/oz) 1,270.22 0.10

WTI crude oil US spot (US$/barrel) 93.29 (1.23)

CPO spot price (RM/tonne) 1,980.00 0.00

Market Indices

Top Actives

Economic Statistics

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Terence WONG, CFA T (60) 3 2261 9088 E terence.wong@cimb.com

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Daybreak│Malaysia

September 8, 2014

2

Global Economic News

The US Federal Reserve has consistently fallen short of its inflation and employment goals, suggesting borrowing costs are still too high and the country is still not making full use of its productive resources, Minneapolis Fed President Narayana Kocherlakota said. (WSJ)

The US Federal Reserve will accelerate its search for a substitute to the Libor benchmark interest rate to stave off what would be "a horrible mess" if the current system collapses with no alternative, Fed Governor Jerome Powell said.

The unsecured interbank lending market on which Libor is based "has been in a secular decline," making it difficult for banks to credibly set the benchmark lending rate that has been wired into an estimated US$150tr in dollar-based contracts worldwide, he said. (Reuters)

US Dallas Federal Reserve Bank President Richard Fisher said he has doubts that inflation has cooled, despite some recent signs of a decline, noting that some economic data has given hints of underlying inflationary

pressure.He noted that his preferred measure of underlying inflation, which strips out the most volatile price movements, showed fast increases in Jul in some the index's largest, least volatile components. (Reuters)

US unemployment rate fell to 6.1% in Aug (6.2% in Jul). (Bloomberg)

US nonfarm payrolls increased 142,000 in Aug (212,000 in Jul). (Reuters)

US Federal Reserve Bank of Philadelphia President Charles Plosser said the economy has “moved much closer” to the Fed’s goals and keeping rates near zero until achieving them is a “risky strategy.” (Bloomberg)

Given the "significant" slack in US labor markets, the Federal Reserve should be patient about reducing monetary policy stimulus and refrain from telling markets exactly when it may raise rates, Boston Federal Reserve Bank President Eric Rosengren said. (Reuters)

Japan’s leading index rose to 106.5 in Jul (105.9 in Jun). The coincident index edged up to 109.9 in Jul (109.7 in Jun) while the lagging index dropped to 117.5 in Jul (118.3 in Jun). (RTT)

A fresh round of negotiations for a three-way free trade agreement (FTA) between South Korea, China and Japan on Sep 5 ended without a clear breakthrough, although the South Korean side said the talks were productive. (Korean Herald)

Taiwan's consumer price index (CPI) rose 2.07% yoy in Aug to hit an 18-month high (+1.76% yoy in Jul). The wholesale price index (WPI) rose 0.12% yoy (+0.92% yoy in Jul). (Focus Taiwan, Bloomberg)

Taiwan's foreign exchange reserves fell to US$423.07bn in Aug (US$423.66bn in Jul), stopping an eight-month gaining streak. (Focus Taiwan)

Daybreak│Malaysia

September 8, 2014

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Indonesia’s foreign exchange reserves rose to US$111.2bn by the end of Aug (US$110.5bn in end Jul), fueled by strong oil and gas export revenue, Bank Indonesia said. (Reuters)

Consumer prices in Philippines accelerated by 4.9% yoy in Aug, the same rate in Jul. On month, inflation rose 0.3% mom in Aug (+0.6% mom in Jul). Core inflation rose 3.4% yoy in Aug (+3.0% yoy in Jul). (Philippines Star)

The Philippines gross international reserves ( GIR) expanded to US$80.78bn in Aug (US$80.64bn in Jul). (Philippines Star)

Malaysian Economic News

The 11th Malaysia Plan (2016-2020), which charts the country’s economic and social direction, will be tabled in Parliament in May next year. Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said the government has collected data from all states except Sabah. “I will be going to Sabah to meet the chief minister. Prime Minister Datuk Seri Najib Razak will give a synopsis of the plan at the tabling of the 2015 Budget next month,” he said. (BT)

More Malaysian swiftlet operators will likely be allowed to export raw unclean bird nests to China by next year, said the Malaysian Federation of Bird's Nest Traders Association. Its President, Datuk Lee Kong Heng said the agreement has been drafted by the Ministry of Agriculture and Agro-Based Industry of Malaysia and Chinese authorities. China lifted the ban the import of raw clean bird's nests from Malaysia in 2013, but allowed only eight companies to export them. (Bernama)

The preliminary report of the 2014 Household Income Survey undertaken by the government indicates that the people enjoy a better standard of living with the average household income surpassing RM5,900 a month. Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar said this was significantly better compared with the survey findings in 2012 which denoted that the average household income then was RM5,000 a month.

"However, growing the economy alone is not enough because we must also ensure that it is being felt by the people, in terms of higher wages. But it must be parallel with productivity," he said. The ratio of wages to the GDP in Malaysia grew to 33.6 per cent last year from 29.3 per cent in 2008. (Bernama)

Malaysia's per capita income is expected to increase to US$15,000 (RM48,352) a year by 2019, a year ahead of the target to achieve a high-income country status in 2020. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the target was supported by sustainable economic growth and positive development in the world's economy.

He said the average household income of 60 per cent of Malaysians has increased by 18 per cent from 2012 to 2014 or equivalent to RM5,000 a month while 40 per cent more Malaysians, especially households in rural areas, are still earning below RM5,000. However, he said the government would continue to emphasise on inclusive economic growth which is signified by the economy growing in tandem with increased household income to ensure that the wealth is fairly distributed to the people. (Bernama)

Daybreak│Malaysia

September 8, 2014

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Bilateral trade between Malaysia and the state of Victoria, Australia can expand beyond traditional sectors such as palm oil, dairy products, copper and petroleum, Commissioner for Victoria to Southeast Asia Tim Dillon said

The bilateral ties have deepened with almost 8,000 Malaysian students studying and 40,000 more living in the south-eastern state, he said.

Dillon said infrastructure is identified as one such sector where the Victorian government's funding of new railway, residential and construction projects is set to hit as much as A$27 billion (RM80.58 million) through 2018.

Another rising star sector is healthcare following the Victorian government's commitment to spend A$17.8 million over the next three years in the quest to take its leading health and aged care solutions to global markets.

Total trade between Malaysia and Victoria jumped 44.6 per cent to A$3.9 million in 2013, boosted by the Malaysia-Australia Free Trade Agreement that took effect on Jan 1, 2013. (Bernama)

The country's franchise industry is at a commendable level with 743 franchisors in various sectors registered with the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) as of August 30 this year.

Its Minister Datuk Seri Hasan Malek said out of this, a total of 7,405 franchisees were successfully created.

Hasan said the government allocated RM8 million financing for the small and micro franchise entrepreneurs this year to help the low-income group venture into franchising.

"We are targeting a five per cent growth in the number of franchise business every year based on Malaysia's position as among the few countries in the world with a comprehensive and strong franchise industry infrastructure, in the aspects of legislation, regulatory, development and funding," he said. (Bernama)

The Developing Eight (D8) Organization for Economic Cooperation is keen to collaborate with Malaysia in the agriculture sector. Its Secretary-General, Dr Seyed Ali Mohammad Mousavi said the D8 countries hoped to be able to implement projects with good potential in Malaysia particularly in oil palm, fishery and tropical fruits sectors.

The D8 countries, consisting of Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey, are now focusing on moving more actively into the project implementation phase to enable them to conclude more real and tangible projects. Some of the projects being discussed were in the manufacturing industries. The other focus areas, he said, included transportation, renewable energy and shipping. (Bernama)

Prime Minister Datuk Seri Najib Tun Razak reaffirmed Malaysia's commitment in the Trans-Pacific Partnership Agreement (TPPA) negotiations. "TPPA is an important undertaking. Malaysia wants to be part of it, provided our concerns can be accommodated in the final outcome," he said.

On the Regional Comprehensive Economic Partnership, Najib said: "Prime Minister Abbott and I agreed that Malaysia and Australia are to continue working together to make progress in the negotiations and look forward to a substantive conclusion on the negotiations in 2015." Last year, Australia was Malaysia's ninth largest trading partner. The two-way goods and services trade was valued at RM61.9 billion in 2013, up from RM46.2 billion

Daybreak│Malaysia

September 8, 2014

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in 2010. This represents a 14.7 per cent increase over three years. (Bernama)

The Agricultural Research and Development Institute (Mardi) has enlisted the help ofRhino Research Europe (RR Group) of Holland to strengthen its research and development (R&D) on seed breeding and production. Mardi Director-General Datuk Dr Sharif Haron said Malaysia still lagged behind Thailand, the Philippines and Indonesia in optimising the science and technology of seed breeding, production and enhancement. "So Mardi is striving towards competency in producing high quality seeds that meet the International Seed Testing Association (ISTA) standards," he said. (Bernama)

Malaysia's digital economy is in a good position with the information communication technology sector contributing 12 per cent of the national gross domestic product (GDP). Multimedia Development Corp's (MDeC) vice-president, Michael Warren, said the healthy contribution amounted to RM113 billion, which represented a significant share of the national GDP of RM941 billion in 2012. "To further accelerate this growth, MDeC's Digital Malaysia 354 Roadmap will game-change Malaysia's digital landscape and undoubtedly sow the seeds to grow Malaysia into a high-income country driven by innovations of the digital economy by 2020. (Bernama)

Malaysia's total trade in July 2014 increased to RM118.6 billion from RM118.59 billion recorded in the same month last year while trade surplus was recorded at RM3.64 billion, said the Ministry of International Trade and Industry (MITI). July exports expanded 0.6% yoy while imports decreased by 0.7%. (Bernama)

The National Institute of Occupational Safety and Health (NIOSH) has suggested that the Finance Ministry seriously consider, for the 2015 Budget, its proposals to help industries and employers promote occupational safety and health to reduce workplace and commuting accidents. Its chairman Tan Sri Lee Lam Thye in a statement said this could be done by granting tax rebate for imported personal protective equipment (PPE) to make them more affordable to employers and available for use by their employees. "Presently, imported PPE like full body harnesses, earmuffs, earplugs, N95 masks, eye wear, etc. are subjected to between five per cent and 20 per cent import duty, besides the 10 per cent sales tax. (Bernama)

Malaysia will participate in the Australia-backed New Colombo Plan initiative which will begin next year, said Prime Minister Datuk Seri Najib Tun Razak. He said the Plan would attract Australian undergraduates who were interested to come to Malaysia for one to two semesters of studies in local universities as well as for mobility programmes such as internship in Malaysia. Abbott said the relationship between Australia and Malaysia was growing stronger with some 300,000 Malaysians having received education in Australia. "In one year, there are about 20,000 Malaysians studying in Australian institutions here in Malaysia," he said. (Bernama)

Malaysia and Australia have committed to contribute AUD60 million (RM180 million) each in their quest to locate the Malaysia Airlines (MAS) MH370 aircraft whose flight path was believed to have ended in the southern Indian Ocean on March 8. Australian Prime Minister Tony Abbott said the contribution was part of the new underwater search phase for the aircraft in the remote ocean sea bed. "It will utilise the best available technology," he said. (Bernama)

Daybreak│Malaysia

September 8, 2014

6

Political News

PAS will reject the position of Selangor Menteri Besar even if it is offered the post, its deputy president Mohamad Sabu said, despite party president Datuk Seri Abdul Hadi Awang having named one or more of its assemblymen for the position. Mohamad Sabu said this after a PAS central committee meeting yesterday. Also at the meeting was PAS secretary-general Datuk Mustafa Ali, who said the party’s position was still the same as had been conveyed to the Pakatan Rakyat leadership council earlier. “We are leaving it to the Sultan of Selangor,” he added.

At a meeting on August 17, the PAS central committee had decided to nominate both PKR president Datuk Seri Dr Wan Azizah Wan Ismail and her deputy, Azmin Ali, as Selangor MB. The committee was by-passed when Hadi independently submitted the names of three other assemblymen to the Selangor Palace. Among the names submitted were Selangor PAS commissioner Iskandar Samad, who is the Chempaka assemblyman. (Malaysian Insider)

PAS’ highest decision-making body, the Syura Council, appears to be overriding the central committee’s decision to stick to PKR and DAP’s nominees for the Selangor menteri besar post. The syura council, comprising ulamas, met after the central committee’s meeting earlier yesterday, and decided that party president Datuk Seri Abdul Hadi Awang has final say in all matters concerning the party’s interest, Harakahdaily reported this evening.

The syura council noted that the PAS constitution gave the party president responsibility over all party matters. It also noted other provisions in the party constitution that obliged the central committee to abide by and execute the orders of the party president.

Hadi has submitted three other names to the Selangor palace separately. One of those names included a PAS assemblyman. (Malaysian Insider)

Corporate News

British American Tobacco (Malaysia) Bhd (BAT Malaysia) has announced that it will increase prices of all its cigarette brands from today. The price of a pack of 20s will go up by RM1 to RM13 for Dunhill, Benson & Hedges and Kent. The price of Lucky Strike and Rothmans brands will also increase to RM13.50 a pack, while the Peter Stuyvesant and Pall Mall cigarette range will increase by RM1 as well to RM11.50/pack. "The operating environment is very challenging with costs to produce and distribute each stick of cigarette escalating due to mounting inflationary cost pressure," said BAT Malaysia managing director Stefano Clini. "This is amplified by progressive loss of legal domestic volumes over the years to illegal trade, decline in contract manufacturing volumes, and an overall very competitive trade and distribution channels," he added. (Financial Daily)

Please read our report for further details.

Eastern & Oriental (E&O) has proposed a bonus issue, free warrants and an issuance of up to RM500m in nominal value of private debt securities (PDS). The proposed bonus issue is up to 114.09 million shares on a 1-for-10 basis while the warrants of 228.19 million is on a 1-for-5 basis. E&O said the proposed PDS issue was a 20-year medium-term notes programme and/or seven-year commercial papers programme. The company said the indicative exercise price of the warrants was assumed at RM2.90, representing a premium of around 4.6 sen or 1.61% to the five-day volume weighted average market price of E&O shares of RM2.854. (Star)

We view the bonus and warrant issues positively as it will help improve liquidity of the stock while raising potential proceeds when the warrants are

Daybreak│Malaysia

September 8, 2014

7

converted. However the PDS is a negative surprise as the eventual conversion will result in dilution to EPS and RNAV. As a result, we are net neutral on the proposals.

Mah Sing Group Bhd expects to clinch RM1.5bn sales during its two-month sales and promotional campaign. “We are aggressive in this two-month campaign as we want to hit the RM1.5bn target. We are moving towards achieving the numbers,” CEO Ng Chai Yong said. There are 18 projects participating in the campaign. The group will continue to aggressively introduce its property projects at the year end, with RM1.9bn new launches remaining from the planned RM4bn this year. (BT)

CIMB Group Holdings Bhd is a step closer to recovering some of the RM1bn owed to it by promoter KIC Oil and Gas Sdn Bhd through the sales of its rights in the stalled Asia Petroleum Hub Sdn Bhd (APH) project in Johor to a foreign investor. CIMB has signed a head of agreement with a consortium led by the Dubai government-owned Emirates National Oil Co and comprising Malaysian parties to acquire CIMB's rights in the project. (Malaysian Reserve)

CIMB Bank is selling its rights in the Asia Petroleum Hub (APH) to a consortium led by the Dubai government’s Emirates National Oil Co (ENOC) and some Malaysian parties. “The heads of agreement provides for the parties to negotiate exclusively with each other and finalise the scope and terms of a sale and purchase agreement. Any agreement would also be subject to the approval of various authorities,” it said.

To recap, Asia Petroleum Hub Sdn Bhd was set up in 2005 as a special-purpose vehicle to build, manage and operate an integrated oil terminal facility. The hub would have multi-product petroleum storage, blending and distribution facilities on a 100-acre reclaimed island at Tanjung Bin, off the Port of Tanjung Pelepas, Johor. (StarBiz)

Tenaga Nasional Bhd (TNB) is in the midst of finalising a proposal to the Energy Commission (EC) featuring technologies that will be able to lower the cost of operating the Track 4A power plant in Pasir Gudang, Johor. “We have signed a heads of agreement with SIPP Energy in July and we have one more month to finalise our proposal to the EC so that discussions can proceed in regards to this contract,” TNB president and CEO Datuk Seri Azman Mohd said.

“The proposal will mainly concentrate on coming up with new technologies that could help lower the operational cost of the new plant. It is still being developed and once submitted, it would be up to the EC to decide,” he said. (BT)

Glove maker Supermax Corp Bhd is set to “grow strongly” next year as it expands distribution of its own brand manufacturing (OBM) products in India, China and Japan, said executive chairman and group managing director Datuk Seri Stanley Thai. Only 6% of its total exports was to Asia currently, Thai told StarBiz on the sidelines of the International Rubber Glove Conference and Exhibition recently.

The group is looking to increase the penetration of its gloves in the region as other glove manufacturers paint a rosy picture for glove demand in emerging markets, with growth seen as high as 100% in some countries. Japan, the world’s third largest economy, would be a key market for Supermax, Thai said. (StarBiz)

Daybreak│Malaysia

September 8, 2014

8

Top Glove Corp Bhd, the world’s largest rubber glove manufacturer by volume, may pare down its stake in its Sumatran rubber plantation and seek out local partners as Indonesia mulls tough new laws to curb foreign ownership of plantations. Acquired in 2012, Top Glove now wants to reduce its interest in the greenfield rubber estate, which has not performed to expectations, says founder and chairman Tan Sri Lim Wee Chai.

The group is scouting for joint-venture partners who can work with the local government and manage employees, Lim tells StarBizWeek on the sidelines of the International Rubber Glove Conference and Exhibition earlier this week. He did not specify if Top Glove was in any active talks with potential partners or how much of the plantation the company was willing to part with. (StarBiz)

Inari Amertron Bhd’s aggressive strategic acquisitions over the past two years have paid off handsomely for the Penang-based technology company.

Its annual revenue has tripled and earnings more than doubled within a year, and it seems the days ahead continue to look good for the company that produces key components such as radio frequency chips for smart mobile devices and high-speed fibre-optics connectors for data system applications.

Inari executive vice-chairman Dr Tan Seng Chuan, nevertheless, prefers to remain modest. When asked about the company’s outlook for the financial year ending June 30, 2015 (FY15), “I can’t say very much about our business outlook for 2015 except that it looks positive at the moment.”

In fact, business has been so good for Inari that all the group’s production facilities are already running at an average utilisation rate of 85%. Tan acknowledges the urgent need for the group to ramp up production capacity amid strong demand from its clients. (StarBiz)

Pantech Group Holdings Bhd, a leading global provider of pipes, valves and fittings (PVF) for the oil and gas industry, has opened its new corporate head office costing RM200m in Pasir Gudang, Johor. The office, which also houses a warehouse, factory buildings, equipment, facilities and land bank in the Pasir Gudang Industrial Estate, was launched by Johor Menteri Besar Datuk Seri Mohamed Khaled Nordin. The 60,000 square feet office will streamline operations and increase efficiency to support market needs and demand from the oil and gas industry, said Pantech Executive Chairman and Group Managing Director Datuk Jimmy Chew. (Bernama)

Malaysian oil and gas (O&G) and energy companies have been urged to tap into the vast opportunities in Mexico which has recently opened its O&G and electric industries to private and foreign investors after over 70 years of state control.

Mexico's Ambassador to Malaysia Carlos Felix Corona said the energy reform allowed foreign direct investment and profit-sharing in Mexico's O&G exploration, refinement, production, transportation and storage, which until recently was the monopoly of state-owned Petroleos Mexicanos (Pemex).

He said Mexico invites foreign bids for O&G blocks from deep waters to mature fields and non-conventional reserves such as shale gas production from January 2015. The Mexican government has identified 109 blocks for the first round of bids and expects investments of around $50bn over the next four years, including partnerships with Pemex.

The two-way trade between Malaysia and Mexico hits US$5.55 billion in 2013 while in first quarter of 2014, the volume stood at US$1.388 billion. (Bernama)

Daybreak│Malaysia

September 8, 2014

9

Raub MP Ariff Sabri Abdul Aziz has accused the government of giving Tony Fernandes and AirAsia preferential treatment and unfair advantage in competing with MAS. The DAP man said, “When AirAsia began to slowly kill MAS with its low fare operations, MAS went before the government asking permission to reduce its fares. What did the government do? It refused the request. That meant preventing MAS from competing with AirAsia. Or was AirAsia given special treatment?" Ariff stated that when repeated requests to lower MAS fares was denied, “Tony and AirAsia slowly began eating into MAS’s business.”

Ariff also questioned the rationale of downsizing MAS by 30% with the Open Sky Policy due to commence next year. “We are intentionally making ourselves smaller,” he said. “Come next year, when the Open Sky policy is implemented in Malaysia, every other airline will virtually be a home-grown airline. “MAS must grow bigger to compete under the Open Sky regime. “It must operate out of all the capital cities in Asean and the world like any home-grown airline—pick up passengers and fly them anywhere.” (Free Malaysia Today)

The plan to save Malaysia Airlines (MAS) could succeed where past endeavours have failed because the government has finally put politics aside by agreeing to sweeping job cuts, people briefed on the restructuring told Reuters. MAS said it would shed nearly a third of its 20,000 workforce.

It is not the first time that MAS has announced a big job cull. In 2006, as then chief executive Idris Jala returned MAS to profitability by cutting costs, the airline announced that 6,500 jobs would go. But those cuts were never implemented in full, partly due to opposition from the main labor union, which has close ties to the ruling United Malays National Organisation (Umno), the party of Prime Minister Najib Razak. One of the sources said that the union's ties to Umno turned job cuts into an "unsurmountable political decision". "The management were frustrated. They could not do anything," he added. "After MH370 and MH17, and with Khazanah planning to spend RM6bn of taxpayer money, the mandate is there."

The sources said MAS was likely to replace its aging, fuel-guzzling fleet of Boeing 777 with newer Airbus A330s and the A350s to maintain medium-haul services, particularly within Asia. The airline could also sell its six Airbus A380s, which it uses on services to London, Paris and Sydney, to stem the losses it makes on operating these jumbo jets. aviation consultancy Endau Analytics.

Another way to boost revenue would be to stop dumping fares in the market, the sources said. MAS has recently adopted a strategy of pricing fares way below their competitors to increase passenger numbers at the expense of profitability. One of the sources, however, said MAS has to be careful about raising fares too fast. (Reuters)

The implementation of the Goods and Services Tax (GST) in April 15 should stimulate demand for vehicles with the reduction of prices due to the abolishment of the sales and services tax (SST), said Malaysian Automotive Institute (MAI) CEO Madani Sahari. The SST of 10% will be abolished on 1 Apr 15 and replaced with the GST at 6%. “This should stimulate demand for cars but we do not expect any major impact on prices due to the implementation of the GST,” he said. (BT, Bernama)

The Employees Provident Fund (EPF) has issued a strongly-worded statement over the leak of a document that was circulated within the board of RHB Capital Bhd (RHBCap), in which it is a major shareholder. The Edge Financial Daily reported last Friday that the said document was endorsed by a board member of RHBCap and detailed the objection against allowing the EPF

Daybreak│Malaysia

September 8, 2014

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to vote in the merger between RHBCap and CIMB Group Holdings Bhd. Referring to Financial Daily's report, EPF described the actions of "certain parties" in divulging such information to the media as "gross misconduct" and a "clear breach of trust and professional duty". It had also asked for an investigation into the leak.

"We find it shocking that certain parties have unscrupulously distributed confidential correspondence and discussions at board level to members of the media. Their actions are unacceptable under Malaysian law and market practice and a clear breach of trust and professional duty," EPF said. (Financial Daily)

Khazanah Nasional is said to be looking to divest its stake in Westports Holdings Bhd, a move that resonates with its policy to reduce stakes in companies that are deemed as non-strategic in its portfolio of investments. Sources said the state investment arm was looking at placing out its entire 4.74% shareholding in Westports to other funds through a book building exercise. Although the funds were not identified, Westports’ current shareholders include AIA Bhd, Hwang Investment Management Bhd and Genesis Group. Other big-name government-linked funds in Westports are Kumpulan Wang Persaraan, Employees Provident Fund, Skim Amanah Bumiputera, Lembaga Tabung Haji and Permodalan Nasional Bhd. (StarBiz)

Ho Hup Construction Co Bhd is raising up to RM52m via a private placement. It said the proceed raised will be used to finance future construction projects. Based on the three projects identified by Ho Hup which it believes has a high possibility of securing the award, the management estimates immediate working capital of RM63m is required. (Malaysian Reserve)

SAM Engineering & Equipment (M) Bhd, which specialises in producing component parts for airline companies such as Airbus and Boeing, is looking at organic expansion as well as through acquisitions. The group with backlog orders of RM2bn that will keep it busy until 2020 has set aside RM200m to invest in its operations in Malaysia over the next two years. Group managing director Jeffery Goh Wee Keng told the expansion would be in line with its plan to position the group as a global player in the aerospace industry. “We plan to be a global player with a presence in the US and Europe in five years, with an annual turnover of more than RM1bn. We are already on track to achieve our RM1bn turnover target in two to three years, which will position our group as a leading player in Asia-Pacific,” he said. (StarBiz)

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BMSB: Changes in shareholdings

Type of No of Ave Price

5-Sep-14 Date transaction securities Company (RM)

EPF 21/8-26/8 Disposed 3,178,700 PETRONAS CHEMICALS

EPF 2/9 Disposed 3,000,000 TELEKOM MALAYSIA

EPF 2/9 Disposed 2,166,700 YTL CORPORATION

EPF 2/9 Disposed 2,000,000 YTL POWER INTERNATIONAL

EPF 2/9 Disposed 1,343,700 MAXIS

EPF 29/8 Disposed 780,000 CIMB GROUP

EPF 2/9 Disposed 722,700 SIME DARBY

EPF 2/9 Disposed 569,400 IOI PROPERTIES GROUP

EPF 2/9 Disposed 491,600 PETRONAS GAS

EPF 2/9 Disposed 285,500 HONG LEONG BANK

EPF 2/9 Disposed 214,100 SUPERMAX

EPF 2/9 Disposed 33,400 LAFARGE MALAYSIA

EPF 2/9 Disposed 27,500 TA ANN HOLDINGS

EPF 2/9 Disposed 10,000 MISC

Skim Amanah Saham Bumiputera 2/9 Disposed 630,000 GAMUDA

Skim Amanah Saham Bumiputera 2/9 Disposed 475,100 UMW HOLDINGS

Kumpulan Wang Persaraan 28/8 Disposed 399,700 AXIS REIT

Kumpulan Wang Persaraan 27/8-28/8 Disposed 354,500 WCT HOLDINGS

Kumpulan Wang Persaraan 27/8-28/8 Disposed 35,600 GAMUDA

Kumpulan Wang Persaraan 27/8-28/8 Disposed 17,400 PETRONAS GAS

KAPEN Capital Partners Limited 2/9 Disposed 289,100 SEAL INCORPORATED

Edisi Firma Sdn Bhd 29/8 Disposed 1,029,900 MY E.G. SERVICES  2.91

Aberdeen Asset Management PLC 4/9 Disposed 78,500 SHANGRI-LA HOTELS

Mitsubishi UFJ Financial Group, Inc 2/9 Disposed 9,000 SHANGRI-LA HOTELS

Mitsubishi UFJ Financial Group, Inc 2/9 Disposed 8,700 AEON CO. (M)

EPF 2/9 Acquired 5,652,200 PUBLIC BANK

EPF 2/9 Acquired 2,663,900 AMMB HOLDINGS

EPF 2/9 Acquired 1,893,900 DIGI.COM

EPF 2/9 Acquired 1,447,800 DIALOG GROUP

EPF 2/9 Acquired 1,437,500 IOI CORPORATION

EPF 2/9 Acquired 1,411,000 SAPURAKENCANA

EPF 2/9 Acquired 1,307,900 IHH HEALTHCARE

EPF 29/8 Acquired 939,500 PERISAI PETROLEUM

EPF 2/9 Acquired 816,500 UMW HOLDINGS

EPF 2/9 Acquired 732,300 AFG

EPF 2/9 Acquired 539,600 AIRASIA

EPF 2/9 Acquired 500,000 BIMB HOLDINGS

EPF 2/9 Acquired 424,600 TAN CHONG MOTOR

EPF 2/9 Acquired 330,400 CAHYA MATA SARAWAK

EPF 2/9 Acquired 275,000 MAH SING GROUP

EPF 2/9 Acquired 252,900 MALAYSIA AIRPORTS

EPF 2/9 Acquired 231,000 KUALA LUMPUR KEPONG

EPF 2/9 Acquired 225,400 TIME DOTCOM

EPF 2/9 Acquired 225,000 PERDANA PETROLEUM

EPF 2/9 Acquired 219,500 PRESTARIANG

EPF 2/9 Acquired 167,000 GENTING PLANTATIONS

EPF 2/9 Acquired 136,500 WAH SEONG CORPORATION

EPF 2/9 Acquired 60,000 MBM RESOURCES

EPF 2/9 Acquired 49,000 BUMI ARMADA

Skim Amanah Saham Bumiputera 2/9 Acquired 150,500 MALAYSIA AIRPORTS

Skim Amanah Saham Bumiputera 2/9 Acquired 36,100 LAFARGE MALAYSIA

Skim Amanah Saham Bumiputera 21/8 Acquired 9,900 FRASER & NEAVE

Permodalan Nasional Berhad 28/8 Acquired 272,600 POS MALAYSIA

Kumpulan Wang Persaraan 27/8-28/8 Acquired 911,200 PRESTARIANG

Kumpulan Wang Persaraan 28/8 Acquired 499,900 SP SETIA

Kumpulan Wang Persaraan 28/8 Acquired 276,200 TOP GLOVE

Kumpulan Wang Persaraan 27/8-28/8 Acquired 65,000 IJM CORPORATION

Kumpulan Wang Persaraan 27/8 Acquired 39,900 GENTING PLANTATIONS

SOURCES: BMSB

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BMSB: Changes in shareholdings

Type of No. of Ave Price

5-Sep-14 Date transaction securities Company (RM)

Lembaga Tabung Haji 28/8-4/9 Acquired 3,667,700 MRCB

Vertical Capacity Sdn Bhd 4/9 Acquired 2,220,000 IOI CORPORATION

T. Rowe Price Associates, Inc 29/8 Acquired 2,192,200 ASTRO MALAYSIA

Bumimaju Mawar Sdn. Bhd. 2/9 Acquired 10,000 BINA PURI HOLDINGS 0.67

DATO' SYED ABU HUSSIN 4/9 Acquired 80,000 GUNUNG CAPITAL

BPH CAPITAL SDN BHD 4/9 Acquired 220,000 DESTINI 

Temasek Holdings (Private) Limited 28/8-29/8 Acquired 135,900 AFG

Mitsubishi UFJ Financial Group, Inc 2/9 Acquired 366,000 CIMB GROUP

Mitsubishi UFJ Financial Group, Inc 2/9 Acquired 30,000 ORIENTAL HOLDINGS

Mitsubishi UFJ Financial Group, Inc 29/8 Acquired 1,000 BAT

MUDAJAYA GROUP 5/9 Shares Buy Back 56,200 MUDAJAYA GROUP 2.06

WAH SEONG CORPORATION 5/9 Shares Buy Back 30,000 WAH SEONG CORPORATION 1.90

DAIBOCHI PLASTIC 5/9 Shares Buy Back 1,800 DAIBOCHI PLASTIC 4.32 SOURCES: BMSB

BMSB: Off-market transactions

5-Sep-14 Vol

SCH 60,100,000

PASUKGB 10,000,000

BJLAND 9,000,000

BHS 8,000,000

SUMATEC 7,000,000

HLIND-CA 3,000,000

SUMATEC-WB 1,300,000

KANGAR 1,100,000

SANICHI 1,000,000

YNHPROP 770,000

MYEG 500,000

Notes:CN-Crossing deal on board lots

MN-Married deal on board lots MO-Married deal on odd lots

SOURCES: BMSB

BMSB: ESOS & others

8-Sep-14 No Of New Shares Date of Listing Nature of transaction

IOI CORPORATION 524,200 08-Sep-14 Exercise of ESOS

MUHIBBAH ENGINEERING 25,000 08-Sep-14 Exercise of ESOS

SOURCES: BMSB

BMSB: Entitlements & trading rights

8-Sep-14 Ann Date Entitlement Ex-date Entitlement

BUMI ARMADA 12-Jun-14 Bonus issue 1:2, 1 Rights @ 1.35 10-Sep-14 12-Sep-14

THONG GUAN 2-Sep-14 1 Rights ICULS @ 2 shares; 1 Free Warrants : 2 Rights ICULS 12-Sep-14 17-Sep-14 SOURCES: BMSB, TE: Tax Exempt

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BMSB: Dividends

Company Particulars Gross DPS (Sen) Ann Date Ex-Date Lodgement Payment

MISC 1st interim dividend - single tier 4.00 6-Aug-14 8-Sep-14 10-Sep-14 24-Sep-14

HARTALEGA Final dividend - single tier 4.00 5-Aug-14 8-Sep-14 10-Sep-14 24-Sep-14

GAS MALAYSIA Interim dividend - single tier 5.00 21-Aug-14 8-Sep-14 10-Sep-14 30-Sep-14

TAN CHONG MOTOR Interim dividend - single tier 3.00 22-Aug-14 8-Sep-14 10-Sep-14 29-Sep-14

TANAH MAKMUR Interim dividend - single tier 6.00 25-Aug-14 8-Sep-14 10-Sep-14 8-Oct-14

MAGNUM Interim dividend - single tier 5.00 21-Aug-14 9-Sep-14 11-Sep-14 26-Sep-14

MAH SING GROUP 1st & final dividend - single tier 8.00 2-Jun-14 10-Sep-14 12-Sep-14 25-Sep-14

MEDIA PRIMA 1st interim dividend - single tier 3.00 14-Aug-14 10-Sep-14 12-Sep-14 30-Sep-14

FELDA GLOBAL VENTURES Interim dividend - single tier 6.00 25-Aug-14 10-Sep-14 12-Sep-14 29-Sep-14

WAH SEONG CORP 1st interim cash dividend - single tier 2.50 25-Aug-14 10-Sep-14 12-Sep-14 2-Oct-14

HOVID  Interim dividend - single tier 0.50 26-Aug-14 10-Sep-14 12-Sep-14 3-Oct-14

PRESTARIANG Interim dividend - single tier 1.44 27-Aug-14 10-Sep-14 12-Sep-14 25-Oct-14

WCT HOLDINGS Interim dividend - single tier 3.53 21-Aug-14 11-Sep-14 15-Sep-14 10-Oct-14

BINTULU PORT Interim dividend - single tier 6.00 26-Aug-14 11-Sep-14 15-Sep-14 9-Oct-14

LAFARGE MALAYSIA Interim dividend - single tier 9.00 29-Aug-14 12-Sep-14 17-Sep-14 15-Oct-14

WELLCALL HOLDINGS 3rd interim dividend - single tier 2.00 29-Aug-14 12-Sep-14 17-Sep-14 30-Sep-14

TOMYPAK HOLDINGS Interim dividend - single tier 1.00 14-Aug-14 15-Sep-14 18-Sep-14 8-Oct-14

UMW HOLDINGS Interim dividend - single tier 10.00 4-Sep-14 23-Sep-14 25-Sep-14 8-Oct-14

STAR PUBLICATIONS Interim dividend - single tier 9.00 18-Aug-14 24-Sep-14 26-Sep-14 17-Oct-14

1st interim: 6 sen; special: 3 sen

CARLSBERG BREWERY Interim dividend - single tier 5.00 26-Aug-14 24-Sep-14 26-Sep-14 10-Oct-14

KPJ HEALTHCARE Interim dividend - single tier 1.45 26-Aug-14 26-Sep-14 30-Sep-14 21-Oct-14

GENTING Interim dividend - single tier 1.00 28-Aug-14 26-Sep-14 30-Sep-14 27-Oct-14

GENTING MALAYSIA Interim dividend - single tier 3.00 28-Aug-14 26-Sep-14 30-Sep-14 22-Oct-14

GENTING PLANTATIONS Interim dividend - single tier 3.00 27-Aug-14 26-Sep-14 30-Sep-14 17-Oct-14

DRB-HICOM Final dividend - single tier 4.50 5-Sep-14 1-Oct-14 3-Oct-14 30-Oct-14

AXIATA GROUP Interim dividend - single tier 8.00 5-Sep-14 7-Oct-14 9-Oct-14 24-Oct-14

EASTERN & ORIENTAL 1st & final dividend - single tier 3.00 22-Aug-14 8-Oct-14 10-Oct-14 5-Nov-14

SBC CORP 1st & final dividend - single tier 4.75 5-Sep-14 14-Oct-14 16-Oct-14 3-Nov-14

YTL CORPORATION 3rd interim dividend - single tier 9.50 28-Aug-14 29-Oct-14 31-Oct-14 14-Nov-14

YTL POWER Interim dividend - single tier 10.00 28-Aug-14 29-Oct-14 31-Oct-14 14-Nov-14

THONG GUAN INDUSTRIES Interim dividend - single tier 3.00 22-Aug-14 5-Nov-14 7-Nov-14 18-Nov-14

ASIA FILE CORP Final dividend - single tier 13.50 4-Sep-14 26-Nov-14 28-Nov-14 26-Dec-14

SOURCES: BMSB

BMSB: Proposed cash calls & trading of rights…

ECO WORLD 25-Apr-14 1 Rights @ 2, 4 Free Warrants @ 5, Private Placement

SBC CORP 27-May-14 Bonus issue 1:2

ASIA FILE CORP 6-Aug-14 Bonus issue 3:5

EASTERN & ORIENTAL 5-Sep-14 Bonus issue 1:10; Free 1:5 warrants

SOURCES: BMSB

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Corporate Actions

September 2014

SUN MON TUE WED THU FRI SAT

1 2 3 4 5 6

Replacement for National Day

External Trade

7 8 9 10 11 12 13

External Reserves (month-end data)

SP Setia 3Q, Industrial Production

14 15 16 17 18 19 20

Malaysia Day CPI MPC Decision B-Toto 1Q

21 22 23 24 25 26 27

External Reserves (mid-month data)

Pengkalan Kubor by-election

28 29 30

Money Supply

Source: Company, BNM, DOS, CIMB estimates

SOURCES: Company, BNM, DOS, CIMB estimates

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Corporate Actions

October 2014

SUN MON TUE WED THU FRI SAT

1 2 3 4

5 6 7 8 9 10 11

Hari Raya Qurban Replacement for Hari Raya Qurban

External Trade External Reserves (month-end data)

Industrial Production

12 13 14 15 16 17 18

CPI

19 20 21 22 23 24 25

Foreign Reserves (mid-month data)

Deepavali Awal Muharram

26 27 28 29 30 31

Money Supply

Source: Company, BNM, DOS, CIMB estimates

SOURCES: Company, BNM, DOS, CIMB estimates

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This publication is strictly confidential and is for private circulation only to clients of CIMBS. This publication is being supplied to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of CIMBS.

Corporate Governance Report:

The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.

The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. CIMBS does not confirm nor certify the accuracy of such survey result.

Score Range: 90 - 100 80 - 89 70 - 79 Below 70 or No Survey Result

Description: Excellent Very Good Good N/A

United Arab Emirates: The distributor of this report has not been approved or licensed by the UAE Central Bank or any other relevant licensing authorities or governmental agencies in the United Arab Emirates. This report is strictly private and confidential and has not been reviewed by, deposited or registered with UAE Central Bank or any other licensing authority or governmental agencies in the United Arab Emirates. This report is being issued outside the United Arab Emirates to a limited number of institutional investors and must not be provided to any person other than the original recipient and may not be reproduced or used for any other purpose. Further, the information contained in this report is not intended to lead to the sale of investments under any subscription agreement or the conclusion of any other contract of whatsoever nature within the territory of the United Arab Emirates.

United Kingdom and Europe: In the United Kingdom and European Economic Area, this report is being disseminated by CIMB Securities (UK) Limited (“CIMB UK”). CIMB UK is authorised and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London, SW1X 7YB. This report is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are persons that are eligible counterparties and professional clients of CIMB UK; (b) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”); (c) are persons falling within Article 49 (2) (a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the United Kingdom; or (e) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the

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Financial Services and Markets Act 2000) in connection with any investments to which this report relates may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This report is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this report relates is available only to relevant persons and will be engaged in only with relevant persons.

Only where this report is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does not constitute independent "investment research" under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any such non-independent report will not have been prepared in accordance with legal requirements designed to promote the independence of investment research and will not subject to any prohibition on dealing ahead of the dissemination of investment research.

United States: This research report is distributed in the United States of America by CIMB Securities (USA) Inc, a U.S.-registered broker-dealer and a related company of CIMB Research Pte Ltd, CIMB Investment Bank Berhad, PT CIMB Securities Indonesia, CIMB Securities (Thailand) Co. Ltd, CIMB Securities Limited, CIMB Securities (Australia) Limited, CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as "U.S. Institutional Investors" as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CIMB Securities (USA) Inc.

Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

CIMB Recommendation Framework

Stock Ratings Definition

ADD The stock’s total return is expected to exceed 10% over the next 12 months.

HOLD The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.

REDUCE The stock’s total return is expected to fall below 0% or more over the next 12 months.

The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.

*Prior to December 2013 CIMB recommendation framework for stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange were based on a stock’s total return relative to the relevant benchmarks total return. Outperform: expected to exceed by 5% or more over the next 12 months. Neutral: expected to be within +/-5% over the next 12 months. Underperform: expected to be below by 5% or more over the next 12 months. Trading Buy: expected to exceed by 3% or more over the next 3 months. Trading Sell: expected to be below by 3% or more over the next 3 months. For stocks listed on Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Outperform: Expected positive total returns of 10% or more over the next 12 months. Neutral: Expected total returns of between -10% and +10% over the next 12 months. Underperform: Expected negative total returns of 10% or more over the next 12 months. Trading Buy: Expected positive total returns of 10% or more over the next 3 months. Trading Sell: Expected negative total returns of 10% or more over the next 3 months.