Maxis Bhd RM5.33: Hold - Dividends, specials and more dividends

Initiating Coverage
Maxis Bhd RM5.33: Hold
- Dividends, specials and more dividends
Hold for a pleasant surprise. The return of Malaysia’s market-leading celco was warmly welcomed on many fronts and may warm hearts further due to its potential to pay generous dividends. Despite keen competition from revived rivals, we expect Maxis to hold its ground at the very least and reward patient investors. Hold with a DCF-derived RM5.80 TP.

Acquisition/Disposal
Construction: Overweight
- PetroSaudi moves into Malaysian construction … targets Sarawak?
Linked to 1MDB and Sarawak? PetroSaudi’s acquisition of Cahya Mata Sarawak’s (CMS) 37.2% stake in UBG at RM2.50 a piece should trigger a general offer (GO) for the remaining UBG shares. It may also trigger GOs at UBG’s subsidiaries, Loh & Loh and Putrajaya Perdana. PetroSaudi will likely use the UBG group’s construction units to further its high impact energy investments in Malaysia, especially in Sarawak, under its USD2.5b partnership with 1Malaysia Development (1MDB). This is positive for FDI flows, but negative for equity investors who will have fewer options to participate in Sarawak’s development potential.

Technicals
The FBM KLCI gained 20.20-points last week in firm local buying activities. Volume (on a daily basis) surged from 1.13b to 1.86b and price movement was volatile with good buying interest last week. The FBM KLCI closed at 1,292.98. The firmer support areas for the FBM KLCI are located in the 1,271 to 1,297 zone. The key resistance areas of 1,300 and 1,338 may cap any rebound activities. Our weekly stock pick for today is a technical “FIRM BUY” call for APM.

Other Local News
EON Cap: Board may meet on Thursday
Proton: Set to complete consolidation of plants by end-2010
Ramunia: Might take over TH Tech
Auto: Miti imposes new rules on local tyre retreaders
Oil&Gas: Global Offshore tipped to win RM350m Petronas deal
Plantation: Seek review of tax, cess and levy
Economy: China group may set up RM11.8b plant in Johor

Outside Malaysia
U.S: Lost 85,000 jobs in December; November payrolls revision shows a gain
U.S: Consumer credit fell in November by USD 17.5b, most on record
U.S: Inventories at wholesalers increase in November
E.U: Unemployment rate unexpectedly jumps to 10% in November
Germany: Exports rise more than forecast in November
U.K: Producer prices jumps in December
China: Tightens home-loan guidance, reaffirms down payment ratio
China: Trade rebounds strongly in December