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Affin Research maintains "Add" on Astro, raised TP to RM3.25
KLCI opens 10.77 points lower in tandem with losses across regional indices
World Bank cuts growth outlook as world enters 'new normal'

Affin Research maintains "Add" on Astro, raised TP to RM3.25

Posted: 12 Jun 2013 06:48 PM PDT

Published: Thursday June 13, 2013 MYT 9:48:00 AM

KUALA LUMPUR: Affin Research is maintaining its "Add" on Astro Malaysia Holdings Bhd as it expects Astro to remain unrivalled in the pay television segment given its premium content selection. Affin also raised its target price to RM3.25 from RM3.12.

Affin said Astro reported a 8.2% drop 1Q14 core net profit of RM124.8mil despite the 14.2% revenue increase of RM1.125bil.

"Core earnings was weaker on-year largely due to earnings before interest, taxes, depreciation and amortization margin contraction from 34.7% in 1Q13 to 33.9% this quarter and higher depreciation charges as a result of the accelerated amortization from its B.yond set top box swap.

"1Q14 revenue growth was driven by net adds of 457.2k, bringing its total sub base to 3.58 million and firmer average revenue per user of RM94.20 vs RM90.30 in 1Q13," it said.

Affin said Astro had also announced an interim dividen per share of two sen.

KLCI opens 10.77 points lower in tandem with losses across regional indices

Posted: 12 Jun 2013 06:30 PM PDT

KUALA LUMPUR: The FBM KLCI fell sharply into the red on Thursday as investors are uneasy with the retreat of the key regional markets.

At 9.12am, the KLCI fell sharply at 10.77 points to 1,764.35. Losers beat gainers 236 to 55. There were 131 unchanged. Turnover was 194.23 million valued at RM98.775mil.

HwangDBS Vickers Research said US equities suffered further losses last night. Leading bellwethers on Wall Street were down between 0.8% and 1.1% as sentiment continued to be weighed down by concerns of premature tightening of quantitative easing programs.

"Still, we reckon our Malaysian bourse will probably show resilience ahead. From a technical perspective, the benchmark FBM KLCI is expected to find strong support at the 1,750 level," it said.

Bloomberg reported Asian equities dropped after the World Bank cut its global growth forecast and as investors mulled out the outlook for monetary stimulus.

It added US stocks fell, with the Dow Jones Industrial Average posting its first three-day losing streak this year, as investors weighed prospects for economic growth and the pace of Federal Reserve stimulus measures.

In Bursa Malaysia, blue chips were the major losers with PetGas down 24 sen to RM20.98, PetDag 20 sen to RM24.88 and Genting Bhd 22 sen to RM10.80.

Plantations declined with KL Kepong down 10 sen to RM21.58 and PPB 12 sen to RM13.62 but Genting Plantations rose 21 sen to RM9.61.

Dutch Lady rose 94 sen to RM47.98, Pharmaniaga 11 sen to RM4.64 and Hartalega nine sen to RM6.39 after it announced its plan for a multi-billion ringgit Sepang factory.

World Bank cuts growth outlook as world enters 'new normal'

Posted: 12 Jun 2013 05:53 PM PDT

WASHINGTON: The World Bank cut its outlook for global growth, saying the economy should expand more slowly this year than last as it cited a deeper-than-expected recession in Europe and a recent slowdown in some emerging markets.

In its twice-yearly Global Economic Prospects report, the bank warned that large developing economies, which have driven global growth in recent years, will not experience the same boom as they did before the global financial crisis and will have to focus on structural reforms to keep expanding.

The bank forecast the world's gross domestic product will grow 2.2 percent this year, slightly below last year's growth of 2.3 percent. In its last forecast in January, the World Bank estimated the world economy would expand 2.4 percent this year.

Andrew Burns, the report's lead author, said the global economy should be less volatile in the future, but growth should slow.

The World Bank estimates the global economy should expand after this year's trough to 3 percent in 2014, and to 3.3 percent in 2015.

"Growth is not slower because of inadequate demand but rather because, in our view, the very strong growth we saw in the pre-crisis period was due to that bubble phenomenon," Burns told reporters.

"What we're seeing now is more in line with the underlying growth potential," he said. "Therefore, this is a case of moving towards the new normal of the post crisis."

Part of that "new normal" will be slower growth rates in countries like Brazil, India, Russia and China, as commodities prices moderate and countries rebalance their economies, the World Bank said.

The World Bank cut its outlook for developing countries, which last year grew at their slowest pace in a decade, to 5.1 percent, from 5.5 percent in the January forecast. The bank said growth in these countries should slowly pick up in the future, to 5.6 percent next year and 5.7 percent in 2015.

Before the global financial crisis hit in 2008, developing countries as a whole were chalking up growth rates of around 7.5 percent, while China expanded at an annual rate of 10 percent.

Evidence has mounted in recent weeks that China's economic growth is fast losing momentum, and economists are abandoning their rosy recovery forecasts and bracing for what could be the country's slowest growth rate in 23 years.

Burns said he was not worried about the slowdown, as it was long expected that China's rapid expansion would moderate as its economy rebalanced away from investment-led growth to focus more on consumption.

The World Bank also said the euro area and fiscal uncertainty in the United States should recede as major risks to the global economy in the future. Instead, developing nations will have to watch out for side effects from the massive monetary expansion in advanced nations like the United States and Japan. - Reuters

Kredit: www.thestar.com.my

Rabu, 12 Jun 2013