MARKET SNAPSHOTS

MARKET INDICESUS CLOSE | CHANGE | (%) CHGDOW 16,457.66 134.60 0.82S&P500 1,872.34 14.72 0.79%NASDAQ 4,198.99 43.23 1.04____________________________________EUROPE CLOSE | CHANGE | (%) CHGDAX 9,555.91 31.28 0.33FTSE100 6,598.37 17.21 0.26CAC 4,391.50 19.76 -0.45____________________________________ASIA CLOSE | CHANGE | (%) CHGNIKKEI 14,828132 0.90HSI 22,151.06 85.53 0.39STI 3,188.6216.45 0.52KLCI 1,849.21 1.52 0.08____________________________________Outlook: US MarketInvestors cheered a speech by Janet Yellen in Chicago Monday morning in which she maintained the Fed will support the economy "for some time to come.Investors hope strong economic data and fading geopolitical risks in Ukraine and beyond will help stocks continue their five-year bull run. Sources from Bloomberg.

Outlook: European MarketRussia began pulling back some troops from Ukraines eastern border as diplomatic moves continued to ease the crisis over its annexation of Crimea. The euro bounced back against the U.S. dollar even as softer-than-forecast inflation numbers added to the discussion of whether the European Central Bank will cut interest rates when it meets later this week. Sources from Reuters.

Outlook: Asian MarketInvestors were unmoved by news that North and South Korea had traded live artillery fire across their disputed maritime border Monday, forcing South Korean islanders to take shelter. The exchange came a day after the North drove up tensions by threatening a new nuclear test.Traders are awaiting the release Tuesday of the Bank of Japan's Tankan survey of Japanese business sentiment, while the US Labor Department will on Friday unveil closely watched non-farm payrolls data for March. Sources from Reuters.Outlook: KLCIThe FBM KLCI index 1.52 points or 0.1% on Monday, led by the decline in plantation shares included Kuala Lumpur Kepong Bhd, IOI Corp Bhd and PPB Group Bhd mostly caused by Crude Palm Oil prices on decline from RM3,000 per tonne. KLCI wavered between a high of 1,852.29 points and low of 1,839.03 saw 1.94 billion shares worth RM2.38 billion with 408 decliners outpacing 384 gainers.Top gainer was Syarikat Takaful Malaysia Bhd while top decliner was American Tobacco ( M ) Bhd and RA Telecommunication Group Bhd was the most-active counter.

Stock Recommendation PROTASCO (5070)

Company Background

Protasco Berhad is an investment holding company operates in four segments: Construction Contracts, Engineering Services, Training and Education, and Trading. The road construction and maintenance activities involve construction of new roads, rehabilitation works, road upgrading, and road maintenance. It provides a range of engineering and consultancy services, such as site investigations, laboratory testing, slope studies, traffic studies, product listing, research and development and quality control and assurance. Kuala Lumpur Infrastructure University College offers a range of foundation, diploma, degree and postgraduate programmes. It markets products, such as bitumen, petroleum products, building materials and MAXON paving machine. In October 2011, its wholly owned subsidiary, HCM Engineering Sdn. Bhd, acquired HCM Kasturi Sdn Bhd and Alkatech Sdn Bhd. On October 20, 2011, it wholly owned subsidiary HCM Engineering Sdn. Bhd., acquired 51% interest in Empayar Indera Sdn. Bhd championed by Dato Hasnur Rabiain Bin Ismail and the present Group Managing Director, Dato Sri Ir Chong Ket Pen. The group was involved in subcontracting works for clients like Projek Penyelenggaraan Lebuhraya Bhd (PROPEL) and Jabatan Kerja Raya (JKR) in the early years. Protasco has completed more than RM3b worth of road and maintenance projects, both domestically and internationally. Board:Main Market

April 2, 2014STC: Sandakan Branch [STC Market Update]Strictly For Internal Circulation Only

Disclaimer: The information and opinions in these slides were prepared by RHB Branch Broking. The investments discussed or recommended in these slides may not be suitable for all investors. These slides have been prepared for discussion purposes only and are not an offer to sell or a solicitation to buy any securities. The employees of RHB Branch Broking may from time to time have a position in or with the securities mentioned herein. Members of the RHB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of these slides. All opinions and estimates included in this session constitute our judgement as of this date and are subject to change without notice.Sector:Construction

Avg Volume (4 weeks):2,602,340

4 Weeks Range:1.49 - 2.04

52 Weeks Range:1.00 - 2.04

Average Price Target:2.35

Price Target Upside/Downside:+0.35

Financial Review

*Protasco has generated a solid 6-year revenue CAGR of +9.1%, reaching revenue of RM972.2m in FY13. Meanwhile, its profit after tax and non-controlling interest (PATANCI) 6-year CAGR grew an impressive +11%. The growth in revenue and PATANCI are undoubtedly linked to its robust road construction and maintenance projects.

*Growth also Contributed by strong progress billings from the property development segment. During last five years, it also experienced a sustainable PATANCI margin mainly due to improvement in the construction costs and high profit margin for some projects

*Consistent dividend payout. Protasco has declared a first interim dividend of 4.0sen per share in November last year and we are anticipating the group to announce a final dividend of 6.0sen, raising its total dividend payout to 10.0sen per share for FY13. High dividend payment in the past years as the group has a strong cash position. We believe that moving forward, the groups solid earnings growth coupled with its relatively low debt and high cash reserves will be able to reward investors with a consistent dividend payout.

Investment Highlights

* Strong construction jobs in the pipeline The groups outstanding construction orderbook stands at RM709m and with a burn-rate of around two to three years. Protasco could also expand its orderbook with another few projects this year worth RM300m from roads infrastructure projects under 10th Malaysia Plan, including the Pan- Borneo Highway project and roads upgrading works. In the Budget 2014, the Government has allocated RM0.5b and RM1b for the Pan-Borneo Highway and for nationwide rural roads network upgrades respectively. Its earnings growth is also likely to be supported by large-scale public housing projects such as PR1MA and PPA1M. Maintenance concession will be renewedProtasco has submitted bids to vie for the soon-to-be expired major road maintenance concession for federal roads covering Pahang, Terengganu Kelantan and Selangor. Nonetheless, we believe that the group is well positioned to renew its road maintenance concession upon expiry given its vast experience in handling road maintenance works and its strong partner with Bumiputera contractors. The group has also submitted a Letter of Intent for the extension of this expiring road maintenance concession last year and is confident in receiving a Letter of Award in the medium term. Thus, expecting a large portion of the group's earnings to be contributed from this renewal.

* De Centrum to be key growth driver for the group.Proposed development of De Centrum to be a key growth driver for the groups earnings going forward. We view that there will be minimal impact from the various property cooling measures imposed of late on its property development unit as its strength lies in its strategic accessibility, amenities and urban and green design development. De Centrum is strategically situated in the South of Kuala Lumpur and is surrounded by two major highways, namely the North-South Expressway and SILK Highway. Apart from the locatin, the growing university population will also drive its property demand for students accommodations.

*Johor projectProtasco is set not to miss on Iskandar development in the Southern Johor region to broaden its earnings base. The group has recently acquired five parcels of 14.4-acre commercial land in Pasir Gudang, Johor for a cost of RM29.6m of approximately between six and eight years. It is expected to launch the Phase 1 next year with a projected GDV of RM800m.

*Profit guarantee in the Oil & Gas business.In January 2014, Protasco officially ventured into the oil & gas industry in Indonesia at a relatively attractive cost of USD22m or RM68.4m through the acquisition of 63% equity interest in PT Anglo Slavic Indonesia (PT ASI) from PT Anglo Slavic Utama (PT ASU).

*Healthy balance sheet. We note that the group is sitting on a large cash pile of RM221.2m (as of December 2013) which should be sufficient for project execution and for acquisition of related businesses without the backing of higher borrowings. Nonetheless, we believe that the group will continue to use its cash to reward shareholders in the range of 10-14sen dividend to investors, translating highly attractive yield of 7.2% and 8.4% for FY14 and FY15 respectively.

Risk

*Slow down in property sales*Dependency on government jobs*Deferment of 10MP projects

Valuation and recommendation

- closed at RM2.00 yesterday with total volume of 5.6m units shares -Buy recommendation on a TP of RM 2.50 RM2.90 per share.- start accumulate