MONEY MASTER

The vote for the most powerful man in this planet, (or woman in this case) is entering into its final act, and the market is shaken by the growing uncertainties surrounding it. Come Nov 8, it’s either Democratic nominee, Hillary Clinton or Republican nominee, Donald Trump that will become the new president-elect of the United States of America (US). While average polls compiled by RealClearPolitics website shows Clinton led by 7.1 percentage points in mid-October, the gap has narrowed down to just 1.7 percentage points following the FBI’s eleventh-hour resuscitation of her email controversy (as of Nov 6). Real Clear Politics average on US election polls (Source: Real Clear Politics) DOES IT MATTER? THE EQUITY INDEX SAYS SO Well, here is a quick look at the world equity index in the past one week, and it's shocking. In the Americas region In the Asia Pacific region In Europe, Middle East & Africa region Source: Bloomberg website It is sh...

Maintain Buy with higher target price (TP) of RM13.05 Scientex Bhd We are excited about Scientex’s multi-year expansion in its consumerpackaging division which would more than quadruple its initial capacityby the end of 2016 and drive a 3-year earnings CAGR of 35% in FY15-18F.Maintain BUY with a SOP-derived MYR13.05 TP (from MYR10.68, 13%upside) as we revise up our sales volume assumptions for its packagingdivision to account for a higher average utilisation rate of 80% for FY16 .  Fast and furious. Already the largest stretch film manufacturer in Asia andamongst the top three globally, Scientex is now embarking on a capacityexpansion spree to grow its consumer packaging capacity through a series ofacquisitions and organic expansions. We continue to highlight Scientex’simpressive feat in building up its consumer packaging to 146,400 tonnes byend-2016, from just 30,000 tonnes in 2014 (CAGR of +121%). Exciting market opportunities . Scientex’s strategy to ramp up...

Maintain Hold with unchanged target price (TP) of RM55 Strategic decision The cessation of BAT’s domestic manufacturing activity is a strategic decision to achieve a more sustainable business model. We estimate that the disposal of its factory land and M&E could fetch about MYR1.45/shr, partially offsetting one-off staff costs, which raises the prospect of a special dividend. Retain HOLD for now with an unchanged MYR55 DCF-TP. To cease manufacturing activity BAT has announced that it will cease its factory operations in Malaysia in stages and that the wind down will be completed by 2H17. Management cites higher production costs on lower legal volumes due to the high excise environment and rise in illicits. What is also the case, in our view, is that it is probably cheaper now, under AFTA, to source from other ASEAN countries, which is why BAT plans to source its tobacco products from other BAT factories regionally. Disposal of manufacturing facility The factory l...