Market Dateline PP 7767/09/2010(025354)

RHB Research Institute

RHB Equity 360°

3 June 2010 (Banks, Gaming; Technical: Ann Joo Resources)

Top Story : Banks – 1QCY10 report card – Another record quarter of profitability Overweight
Sector Update
- Overall, 1QCY10 reporting season resulted in another quarter of record aggregate profit (+47.7% yoy;
+3.8% qoq) being reported for the domestic banking system. Non-interest income was higher while net
interest income, overheads and loan loss provisions were generally stable qoq.
- Notwithstanding the record profits, this appeared to have been largely factored in. Of the eight bank stocks
that we cover, two came in above our expectations while the rest were within our estimates (4QCY09: three
above and five in line). As compared to consensus, two results were above consensus estimates while the
rest were in line (4QCY09: two above and six in line).
- Absolute gross NPL/impaired loans as at end-Mar’10 rose 21.5% as compared to end-Dec ’09, largely due
to the adoption of FRS139. Consequently, aggregate gross and net NPL/impaired loans ratio stood at
3.94% (end-Dec ’09: 3.32%) and 2.31% (end-Dec ’09: 1.5%) respectively. Adjusting 31 Dec ’09 figures for
the adoption of FRS139, we find that absolute gross NPL as at end-Mar ’10 actually fell 2.3%.
- During the reporting season, our earnings forecasts for the banks were unchanged except for AFG and
AMMB, where we had updated our numbers for their respective full-year results.
- Overweight stance for the sector maintained.

Sector Call

Gaming : Singapore gaming market – Expanding despite competition Overweight

Sector Update
- LVS expects a gaming market size in Singapore of about US$4bn (or S$5.6bn), which is 40% higher than
our assumption of S$4bn and consensus estimates which range between US$2-3.5bn (S$3.5-5bn) in 2011,
the first full year of operations for both casinos. This is based on a 50:50 split for VIP and mass market and
on the “real, natural” market, excluding junket operators’ additional business volumes. If Genting Singapore
succeeds in bringing in junket operators to its casino, LVS believes the market size could be considerably
bigger than its own already bullish (in our view) estimates.
- All in, we believe the conference call served to confirm our bullish view on the Singapore gaming market
and Genting Singapore. We believe the market is definitely big enough for two players and that ultimately,
both players serve a different target market, both having carved their own niche in the market. We believe,
however, that as the market becomes more mature, that both players will have to innovate and creatively
rejig the dynamics of its gaming product as well as its other attractions, in order to keep casino patrons
interested and sustain the flow of visitors.
- No change to our forecasts for Genting Singapore and our Overweight on sector. No change to the
recommendations of Outperform for Genting (FV = RM8.95), Genting Singapore (FV = S$1.35) and BToto
(FV = RM4.95); and Market Perform for Genting Malaysia (FV = RM2.90).

Technical Highlights

Daily Trading Strategy : Resumption of the corrective wave imminent…

- In line with our expectation, the FBM KLCI extended its losing streak for a second day.
- The failure to cross even to above the 10-day SMA and the lack of a confirmation candle for a possible
negative reversal ahead suggest a resumption of the recent corrective wave imminent.
- We expect a retest of the immediate support level of 1,250 and the recent low of 1,243.86 soon.
- Therefore, we maintain the FBM KLCI’s near- to medium-term bearish view, and stick to our correction
target region of between the 23.6% FR level at 1,229 and the 38.2% FR level near 1,154. In between these
levels is a psychological level at 1,200.
- In the meantime, the 10-day SMA and the 1,300 psychological barrier will act as a major resistance to any
attempt on the upside.
 Daily Technical Watch: Ann Joo Res – RM2.40 and 10-day SMA will become immediate resistance levels …
- 10-day SMA: RM2.424
- 40-day SMA: RM2.73
- Support: IS = RM2.17 S1 = RM1.70 S2 = RM1.42
- Resistance: IR = RM2.40 R1 = RM2.70 R2 = RM2.98

Bulletin Board

Co/Sector News Impact Recom

Plantations According to Indonesia’s Chief Economic Positive, as this will allay concerns that plantation OW
Minister Hatta Rajasa, Indonesia won't revoke companies and investors may have had that the
existing forestry licences for palm oil firms as part government would rescind the existing greenfield
of a deal with Norway to preserve rain forests, as plantation licences already owned by plantation
the government had no intention of limiting the companies.
expansion of the US$15bn Indonesian palm oil
industry, although it was committed to slowing
deforestation. (Reuters)
Maybank Maybank expects its consumer loans segment to As at end-Mar ’10, its domestic gross loan book OP, FV =
grow by 15% yoy and consumer deposits by 10% had grown by 7% yoy, led by the consumer RM8.96
yoy for FY06/10. (Financial Daily) segment (+13.9% yoy) while consumer deposits
was up 7.3% yoy. Both these would help lend
support to our total gross loan growth of 8% and
deposit growth of 9%.
MAHB MAHB is expecting to secure two more airlines Positive. This is in line with MAHB’s 5-year OP, FV =
from the region to fly to KLIA by 4QFY10 after business plan to grow passenger volume by RM5.45
securing Oman Air, Mahan Air and Royal adding 5 new destinations each year.
Jordanian Airlines. (StarBiz)

Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
Ire-Tex Corporation First and final tax exempt dividend of 2.5 sen 28-Jun-10 29-Jul-10
UPA Corporation First and final dividend of 10 sen less 25% tax 6-Jul-10 28-Jul-10
Nilai Resources Group First and final dividend of 2.5 sen less 25% tax 12-Jul-10 30-Jul-10
YSP South East Asia First and final single tier dividend of 6 sen 26-Jul-10 18-Aug-10
EP Manufacturing Final dividend of 1 sen less 25% tax 5-Aug-10 23-Aug-10
Rex Industry First and final dividend of 2 sen less 25% tax 19-Aug-10 17-Sep-10
Mah Sing Group First and final dividend of 6.5 sen less 25% tax 8-Sep-10 17-Sep-10

Going “ex” on 4 Jun

Public Packages Holdings First and final tax exempt dividend of 2.5 sen 4-Jun-10 17-Jun-10
APM Automotive Holdings Final dividend of 10 sen less 25% tax 4-Jun-10 22-Jun-10
Hup Seng Industries Final dividend of 4 sen single tier 4-Jun-10 22-Jun-10
Faber Group Final dividend of 6 sen less 25% tax 4-Jun-10 23-Jun-10
Ni Hsin Resources Final dividend of 0.67 sen less 25% tax 4-Jun-10 30-Jun-10
Leader Universal Holdings First interim dividend of 1.5 sen less 25% tax 4-Jun-10 30-Jun-10

...For more details, see individual reports attached

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