Maybank Research 17 Nov 2011

SECTOR UPDATE

Media : Underweight Oct 2011 adex: Reality bites Another eerily silent month. Oct 2011 total gross adex was still up 4% YoY but more disturbingly, TV adex contracted 6% YoY, the largest contraction since Feb 2009. We understand that this was due to weakening consumer sentiment. Historically, TV adex is more sensitive to sentiment fluctuations than newspaper adex. Nov 2011 is expected to be another quiet month due to lack of adex friendly events. Maintain Underweight on the media sector.

Technicals The FBM KLCI declined by 0.38-points to close at 1,476.84 yesterday. Its resistance areas of 1,476 and 1,494 will cap market gains, whilst the weaker support areas may be located at 1,452 and 1,470.Due to the US markets’ very poor tone last night, we may see another downward day for the index. Trading idea is a Take Profit call on PCHEM. Other Local News UEM: Toll compensation waiver. UEM Group and EPF, the joint offerors for the assets and liabilities of PLUS Expressways, have agreed to waive the RM2.9b of outstanding compensation owed by the government. There would not be any compensation accorded to PEB for the toll-freeze effective from 2011 to 2015, which would otherwise cost the government an additional RM3.6b. (Source: The Star) Maxis: Broadband tie-up with Measat. Maxis has entered into an agreement with Measat Broadband to provide affordable, high-speed satellite broadband connectivity to customers nationwide. Maxis said it has signed on as an anchor partner of the Measat-5 satellite and it will be able to extend its wide range of services to remote areas all over Malaysia via its VSAT technology. (Source: The Edge Financial Daily) Maybank: To boost from prospects of expansion to Laos. CEO Datuk Seri Abdul Wahid Omar revealed in an interview that Maybank is in talks with regulators in Laos to acquire a banking license which will allow it to open a branch there. Maybank is targeting 40% of its profit from outside Malaysia by 2015 from 23% currently through brand and presence of newly acquired Kim Eng Holdings. (Source: The Edge Financial Daily) Axiata: CEO says stake in India's Idea for long term. Axiata Group, which owns about a fifth of Indian mobile phone carrier Idea Cellular, does not plan to sell its stake in the company as it consider itself to be a long-term investor. Axiata maintains confidence in the company as Idea Cellular focuses on increasing revenue from high-margin data services. (Source: The Edge Financial Daily) Automotive: Oct vehicle sales up 2.59% to 53,654 units. Total vehicle sales rose by 2.59% to 53,654 units in October, from the 52,297 units sold in the same month last year, said the Malaysian Automotive Association (MAA). The October sales volume was 21% or 9,247 units higher compared with September, supported by the return of consumer buying interest and a longer working month. (Source: The Sun)