1. Art and Diseño

February 6, 2015
Global Markets Research
Daily Market Highlights
.
Key Takeaways
Overnight Economic Data




MA
US
 Investors turned to risk-off mode following ECB’s announcement to cut funding to debt-stricken
Greece. The EU commission, ECB and IMF-collectively known as the troika- did not come to
an agreement with Greece’s new government on conditions of the bailout. ECB will no longer
take Greek bonds as collateral for cash. No surprises from BOE as the central bank maintained
interest rate at 0.5% and asset purchase target at £375B.On the local front, Malaysia’s exports
staged a surprised pick-up to increase 2.7% yoy in Dec, contributed by higher E&E exports
and rebound in LNG shipment. Imports jumped 4.2% in Dec versus 0.1%, bringing trade
balance to RM 9.2bn.
EU
UK
Government Bond Yield
 USD weakened against 9 G10s overnight while the Dollar Index slipped to a 2-week low of
93.52, impacted by strong rallies in European majors, particularly EUR. We expect USD to
stay soft going into employment data, with scope for a moderate / strong rally if US data
outperforms. MYR weakened 0.33% to 3.5742 against USD on the back of renewed decline
in oil prices, but narrowed its losses following better than expected Malaysian exports data.
Overnight weaker USD should allow MYR to appreciate in early trading but we set sights on
some weakness in later trading on paring of positions going into the weekend.
MYR
 Govvies trading volume fell to about RM 4.8b with most benchmarks offered as sentiment
remained dampened by sagging overnight markets. The 10y yield was traded higher by 1bp to
3.75% while yields on the 5y, 15y and 20y also gained 1bp each to 3.63%, 4.08% and 4.33%
respectively. We expect yields to likely stay on the uptrend on expectations of MYR weakness
tracking sliding oil prices as well as some position offloading going into the weekend.
UST
3-year
3.49
5-year
3.63
7-year
3.68
10-year
3.75
15-year
4.08
20-year
4.33
30-year
4.59
2-year
0.52
5-year
1.30
10-year
1.82
30-year
2.43











Daily Supports - Resistances
What’s Coming Up Next
Major Data

MA foreign reserves

US change in nonfarm payroll, unemployment rate

UK trade balance

JP leading index
S2
S1
Indicative
R1
R2
Outlook
EURUSD
1.1423
1.1460
1.1466
1.1478
1.1500

USDJPY
117.00
117.30
117.38
117.54
117.74

GBPUSD
1.5370
1.5320
1.5330
1.5344
1.5350

AUDUSD
0.7743
0.7800
0.7818
0.7825
0.7850

EURGBP
0.7442
0.7450
0.7478
0.7482
0.7500

USDMYR
3.5330
3.5421
3.5465
3.5550
3.5671

Major Events

Nil
EURMYR
4.0500
4.0575
4.0654
4.0707
4.0785

JPYMYR
3.0388
3.0127
3.0213
3.0310
3.0388

Bond Tender
GBPMYR
5.4230
5.4332
5.4377
5.4400
5.4443

SGDMYR
2.6355
2.6380
2.6386
2.6410
2.6460

AUDMYR
2.7600
2.7696
2.7735
2.7800
2.7850

NZDMYR
2.6200
2.6233
2.6278
2.6300
2.6340


Nil
 = above 0.1% gain
 = above 0.1% loss
Name
Last Price
DoD %
YTD %
1803.0
1.2
2.4
17673.0
0.0
-0.8
WTI oil ($/bbl)
S&P 500
2041.5
-0.4
-0.8
Brent oil ($/bbl)
FTSE 100
6860.0
-0.2
4.5
Shanghai
3174.1
-1.0
24679.8
3417.6
KLCI
Dow Jones Ind.
Hang Seng
STI
Source: Bloomberg
1
Name
CRB Index
 = less than 0.1% gain / loss
Last Price
DoD %
YTD %
220.5
-3.0
-4.1
48.5
-8.7
-9.1
-5.5
54.2
-6.5
Gold (S/oz)
1264.8
-0.4
7.4
-1.9
CPO (RM/tonne)
2125.5
-2.6
-7.5
0.5
4.6
Copper ($/tonne)
5705.0
0.3
-9.4
0.3
1.6
Rubber (sen/kg)
365.0
1.4
-3.3
 Macroeconomics
Economic Data
MA Exports YoY
US Initial Jobless Claims
US Trade Balance
EU Markit Eurozone Retail PMI
UK BOE Asset Purchase Target
UK Bank of England Bank Rate
UK Halifax House Price
3Mths/Year
AU AiG Perf of Construction
Index
MA Exports YoY
US Initial Jobless Claims
US Trade Balance
For
Actual
Last
Survey
Dec
31-Jan
Dec
Jan
Feb
5-Feb
2.7%
278K
-$46.6B
46.6
£375B
0.5%
2.1%
265K
-$39.0B
47.6
£375B
0.5%
1.0%
290K
-38.0B
-£375B
0.5%
Jan
8.5%
7.8%
7.7%
Jan
45.9
44.4
Dec
31-Jan
Dec
2.7%
278K
-$46.6B
2.1%
265K
-$39.0B
1.0%
290K
-38.0B

US data release were less upbeat today, as the number of newly
unemployed climbed to 278,000 in the week ended 31 Jan compared
to 265,000 in the previous week. Trade deficit widened to $46.6B in
Dec from $39.0B in Nov, as imports grew due to the stronger USD.

Data from UK mostly came with no surprises yesterday. The central
bank will maintain the £375B asset purchase target, the same since
July 2012. Also in line with expectation, BOE kept interest rate
unchanged and accommodative at 0.5% as concern with low inflation
persisted. To add to the string of recent solid data, house prices jumped
8.5% in Jan, beating the forecasted 7.7% and previous reading of
7.8%.

ECB cut funding to Greece, pushing the burden of supporting the
country’s banks back to Athens, as the central bank refuse to accept
Greek bonds as collaterals for cashas Greece and the troika fail to
come to an agreement on bailout terms. Separately, ECB highlighted
falling oil prices as catalyst for growth in the latest economic bulletin,
while some of the key challenges towards recovery of the 19 nation
bloc were high unemployment, underutilized capacity and the
necessary balance sheet adjustments in the private and public sectors.
Market’s focus was on the troika and Greece, overshadowing
eurozone’s modest Jan retail PMI of 46.6 as it declined against the 47.6
print recorded in Dec.

Australia’s performance of construction index was up 45.9 in Jan versus
44.4 in Dec. The increase was contributed by higher employment (47.5
in Jan, 39.9 in Dec) and selling prices (46.0 in Jan, 42.5 in Dec) while
slightly offset by the decline in capacity utilization (66.5 in Jan, 72.5 in
Dec).

Back home, exports staged a surprised pick-up to increase 2.7% yoy in
Dec, contributed by higher E&E exports and rebound in LNG shipment.
Imports increased at a much faster pace of 4.2% in Dec versus 0.1% in
Nov, bringing trade balance to a narrower RM 9.2bn. Shipment to China
contracted for six consecutive months but was offset by higher exports
to the US (+RM1.3bn), EU (+RM1.2bn), South Korea. Spike in imports
on consumption goods was likely boosted by seasonal demand.
Source: Bloomberg
Economic Calendar Release Date
Country
Date
Event
MA
02/06
Foreign Reserves
US
02/06
Reporting Period
Survey
Prior
Revised
30-Jan
--
$111.2B
--
Change in Nonfarm Payrolls
Jan
230K
252K
--
Unemployment Rate
Jan
5.60%
5.60%
--
02/07
Consumer Credit
Dec
$15.000B
$14.081B
--
EU
02/09
Sentix Investor Confidence
Feb
--
0.9
--
UK
02/06
Visible Trade Balance GBP/Mn
Dec
-£9100
-£8848
--
JP
02/06
Leading Index CI
02/09
Trade Balance
CH
02/08
2
Dec
-£1700
-£1406
--
Dec P
105.4
103.9
--
BoP Current Account Balance
Dec
¥379.4B
¥433.0B
--
Consumer Confidence Index
Jan
--
38.8
--
Eco Watchers Survey Outlook
Jan
--
46.7
--
Exports YoY
Jan
5.5%
9.70%
--
Forex
Source: Bloomberg
FX Table
MYR
Name
Last Price
DoD %
High
Low
YTD %
EURUSD
1.1477
1.16
1.1499
1.1304
-5.2
USDJPY
117.53
0.21
117.6
117.02
-1.9
GBPUSD
1.5328
0.96
1.5344
1.5167
-1.6
AUDUSD
0.7798
0.58
0.7825
0.7734
-4.6
EURGBP
0.7487
0.18 0.75104
0.7450
-3.6
USDMYR
3.5742
0.33
3.5915
3.5615
2.2
EURMYR
4.0652
-0.40
4.0717
4.0334
-4.4
JPYMYR
3.0415
0.13
3.0644
3.0363
4.1
GBPMYR
5.4417
0.77
5.4493
5.4055
-0.1
SGDMYR
2.6508
0.14
2.6622
2.6427
0.1
AUDMYR
2.7863
0.13
2.7901
2.7628
-2.8
NZDMYR
2.6396
0.00
2.6466
2.6199
-3.7

MYR depreciated 0.33% against the USD to 3.5742 yesterday, reversing
gains from previous trading session supported by the rebound in oil price.
Weakness of MYR persisted particularly against major currencies, with the
exception of EUR.

MYR strengthened against the USD in today’s open but we opine that
reversal will likely take place in later trading session amid paring of
positions ahead of the week’s close and US data tonight.
USD

USD weakened against 9 G10 on the back of rally in European majors,
particularly that of EUR. The Dollar Index closed at its lowest in 2 week at
93.52, sliding through all sessions, most in European trading.

Expect USD to soften up ahead of US employment data, carrying a slight
overnight downside momentum; we caution that there is potential for a
moderate / strong rally if US data outperforms.
EUR

EUR strengthened against 8 G10 and 1.16% against USD to 1.1477, led
by improved sentiment in Greece following agreement by ECB to extend
funding to Greek banks, potentially preventing an onset of another crisis.

EURUSD is expected to carry an upside bias heading into European and
MYR vs Major Counterparts (% DOD)
EUR
-0.40
JPY
0.13
AUD
0.13
SGD
0.14
USD
HKD
MYR
Appreciated
CHF
MYR
Depreciated
0.33
0.38

GBP strengthened 0.96% against a sliding USD to 1.5328, near 5-week
high and advanced against 6 G10s on improved European sentiment.

GBPUSD is slightly bullish in our view going into European and US
trading, but we caution that solid US data would quickly dampen current
strength.
0.57
CNY
0.00
GBP
0.33
GBP
-0.50
US trading tonight but we caution that current optimism stemming from
Greece is likely to be brief. Solid US data would quickly overturn EURUSD
gains.
0.77
0.50
1.00
JPY

JPY normalized 0.21% against USD to 117.53 and fell against all G10s
following a decline in refuge demand as Europe rallied.

We expect JPY to trade slightly bearish, as demand for the currency is
likely to ebb following the cheer in Europe.
AUD

AUD rebounded to level seen in the beginning of the week at 0.7798, up
0.58% against a weak USD but was mixed against the G10s, outperformed
by European majors.

We expect AUD to trend slightly higher against a soft USD heading into
US employment data.
SGD

SGD closed 0.26% higher against a soft USD yesterday but weakened
against 8 G10, mostly offset by gains in European majors.

We expect SGD to be slightly bearish as risk aversion will likely pick-up
ahead of US employment data.
3
 Fixed Income
US T
T e nure
C lo s ing ( %)
2-yr UST
0.52
C hg ( bps )
-4
5-yr UST
1.30
-5
10-yr UST
1.82
-7
30-yr UST
2.43
-8
M GS
US Treasuries

G II*
T e nure
C lo s ing ( %)
3-yr
3.49
C hg ( bps )
0
C lo s ing ( %)
3.71
C hg ( bps )
0
5-yr
3.63
1
3.89
0
7-yr
3.68
0
3.98
0
10-yr
3.75
1
4.08
0
15-yr
4.08
1
4.36
0
20-yr
4.33
1
4.57
0
30-yr
4.59
0
MGS

* M arket indicative levels
M Y R IR S Le v e ls
IR S
C lo s ing ( %)
1-yr
3.71
2
3-yr
3.72
2
5-yr
3.80
1
7-yr
3.91
1
10-yr
4.00
4
UST rallied with following on the back of continued decline in oil
prices as well as some refuge demand ahead of US employment
data tonight. The 30y yield dropped 8bps, the most amongst the
benchmark, to 2.43% while the 10y yield fell 7bps to 1.82%. The
2y and 5y benchmarks also gained, with yields settling at 1.30%
(-5bps) and 0.52% (-4bps) respectively. Expect USTs to likely be
supported ahead of US data.
C hg ( bps )
Govvies trading volume fell to about RM 4.8b with most
benchmarks offered as sentiment remained dampened by sagging
overnight markets. The 10y yield was traded higher by 1bp to
3.75% while yields on the 5y, 15y and 20y also gained 1bp each
to 3.63%, 4.08% and 4.33% respectively. We expect yields to
likely stay on the uptrend on expectations of MYR weakness
tracking sliding oil prices as well as some position offloading going
into the weekend.
So urce : B lo o mberg
PDS/Sukuk
Daily Trades Government Bonds
Securities
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
MGS
GII
GII
GII
GII
GII
MGS
GII
02/15
10/15
07/16
09/16
02/17
03/17
09/17
10/17
02/18
03/18
09/18
10/19
11/19
03/20
07/20
07/21
09/21
08/22
03/23
07/24
05/27
04/30
06/31
04/32
04/33
09/43
05/24
07/22
04/19
12/28
11/17
02/24
11/16
Closing
Vol
Previous
YTM
(RM mil)
YTM
3.276
3.326
3.373
3.364
3.482
3.428
3.524
3.495
3.585
3.590
3.609
3.630
3.656
3.663
3.720
3.772
3.664
3.788
3.769
3.718
4.007
4.079
4.240
4.259
4.257
4.607
4.027
3.949
3.803
4.304
3.673
4.208
3.670
236
62
398
159
0
10
19
227
9
58
3
731
14
41
3
17
102
4
122
255
0
227
1
11
1
32
1042
891
60
40
20
80
10
4885
3.248
3.282
3.343
3.387
3.495
3.458
3.504
3.495
3.548
3.659
3.623
3.632
3.623
3.739
3.690
3.702
3.669
3.772
3.769
3.750
4.053
4.097
4.147
4.236
4.261
4.588
4.050
3.959
3.853
4.304
3.658
4.231
3.650
Source : BPAM
4
Previous
Trade Date
(dd/mm/yyyy)
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
04/02/2015
27/01/2015
04/02/2015
04/02/2015
29/01/2015
30/01/2015
Chg
(bp)
3
4
3
-2
-1
-3
2
0
4
-7
-1
0
3
-8
3
7
0
2
0
-3
-5
-2
9
2
0
2
-2
-1
-5
0
2
-2
2

Trading volume remained thin with only RM 244m dealt, mostly
unchanged. Gains were seen in Malaysia Airport Holdings’ 24,
which fell 7bps to 5.53%, while IJM’ 20 shed 4bps to 4.52%. Other
notable gainers include Danainfra’ 24 (-3bps to 4.34%) and
Sarawak Energy’ 24 (-2bps to 4.75%), with other trades closing
unchanged.
Daily Trades: PDS / Sukuk
Securities
Rating
Berjaya Land Berhad
12/17
AAA (FG)
Silver Sparrow Berhad
04/16
AAA (BG)
Cagamas MBS Berhad
05/22
AAA
Mecuro Properties Sdn Berhad
07/15
AAA
TNB Western Energy Berhad
01/30
AAA
Malaysia Airports Capital Berhad
12/22
AAA
Aquasar Capital Sdn Berhad
07/16
AAA
Aquasar Capital Sdn Berhad
07/29
AAA
CIMB Bank Berhad
09/18
AA1
Malayan Banking Berhad
01/19
AA1
Sarawak Energy Berhad
06/16
AA1
Sarawak Energy Berhad
07/24
AA1
Anjung Bahasa Sdn Berhad
06/15
AA1
CIMB Islamic Bank Berhad
09/17
AA+
Hong Leong Bank Berhad
06/19
AA2
PBFIN Berhad
06/19
AA2
Malaysia Airport Holdings Berhad
12/24
AA2
Golden Assets International Finance Limited
11/17
AA2
CIMB Thai Bank Public Company Limited
07/19
AA3
Hong Leong Bank Berhad
09/19
AA3
Prominic Berhad
05/16
AA3
CIMB Group Holdings Berhad
04/20
AA3
IJM Corporation Berhad
04/20
AA3
BGSM Management Sdn Berhad
12/15
AA3
Gamuda Berhad
03/18
AA3
Jimah Energy Ventures Sdn Berhad
11/20
AA3
Malakoff Power Berhad
12/15
AATropicana Corporation Berhad [fka Dijaya Corporation
11/17
Berhad]AA2 (BG)
Projek Lebuhraya Usahasama Berhad
01/24
AAA
Aman Sukuk Berhad
05/24
AAA
Perbadanan Tabung Pendidikan Tinggi Nasional 03/24
GG
Malaysia Debt Ventures Berhad
08/20
GG
Pengurusan Air SPV Berhad
11/20
GG
DanaInfra Nasional Berhad
07/24
GG
Perbadanan Tabung Pendidikan Tinggi Nasional 08/21
GG
Closing
YTM
4.60
4.11
4.58
3.98
4.96
4.60
4.02
4.86
4.88
4.95
3.98
4.75
3.98
4.96
5.22
5.37
5.53
4.80
5.00
4.92
3.72
5.50
4.52
4.15
4.38
4.91
4.20
4.56
4.52
4.57
4.40
4.12
4.13
4.34
4.18
Vol
(RM mil)
Previous
YTM
5
10
5
5
1
10
5
5
1
1
10
10
5
1
2
1
10
1
1
1
1
1
20
14
10
3
10
5
25
15
20
10
10
5
5
244
4.600
4.112
4.583
3.975
4.959
4.598
4.019
4.859
4.880
4.950
3.980
4.768
3.983
4.961
5.223
5.366
5.600
4.800
5.001
4.922
3.718
5.500
4.558
4.150
4.377
4.907
4.199
4.555
4.518
4.570
4.398
4.115
4.130
4.370
4.179
Previous
Trade Date
(dd/mm/yyyy)
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
28/01/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
26/01/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
26/01/2015
05/02/2015
04/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
05/02/2015
04/02/2015
05/02/2015
Chg
(bp)
0
0
0
0
0
0
0
0
0
0
0
-2
0
0
0
0
-7
0
0
0
0
0
-4
0
0
0
0
0
0
0
0
0
0
-3
0
Spread
Against
IRS**
88
40.2
67.3
26.5
78.9
67.8
30.9
68.9
112
119
27
74.9
27.3
124.1
146.3
160.6
152.9
108
124.1
112.7
0.8
170.5
72.3
44
65.7
107.7
48.9
83.5
59.8
57
39.8
28.5
30
34
26.9
** spread against nearest indicative tenured IRS
Source : BPAM
Market/Corporate News: What’s Brewing
Construction based company Fututech Bhd will acquire a private construction company
belonging to its executive chairma Tee Eng Ho for RM 400mil. The deal will be financed
with shares and cash. Future profit for the next three years is forecasted to be RM
150million while order book will increase by RM 2 billion. Fututech provides products and
services for construction and property sectors. Counting SP Setia Bhd and Eco World
Development Bhd among their existing clients, the company was a former associate
company of Eastern & Oriental Bhd.
(Source: The Star Online)
YNH Property Berhad entered into a memorandum of understanding (MoU) with Hilton
Worldwide Manage Ltd, with the latter to manage a hotel at Menara YNH and would be
branded “Hilton Kuala Lumpur City Centre and Residences”. YNH acquired a 1.2 ha
freehold commercial site for RM 63 mill in July 2004. After two lapsed agreements, one
with Singapore CapitaLand Ltd in Dec 2006 and the other with Kuwait Finance House (M)
Bhd in Jan 2008, YNH latest development project would comprise of a hotel, offices, and
retail outlets with gross development value of RM 3.4billion, according to the report on
The Star.
(Source: The Star Online)
5
Rating Actions
Issuer
PDS Description
YTL Corporation Berhad
Sources: RAM
6
Rating/Outlook
Action
RM 500m MTN programme (2004 / 2019)
AA1 / Stable
Reaffirmed
for both
Up to RM 2b MTN programme (2013 / 2038)
AA1 / Stable
Hong Leong Bank Berhad
Fixed Income & Economic Research, Global Markets
Level 6, Wisma Hong Leong
18, Jalan Perak
50450 Kuala Lumpur
Tel: 603-2773 0469
Fax: 603-2164 9305
Email: [email protected]
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