CIMB rises 2% on acquisition news

KUALA LUMPUR (April 3 ) : Shares of CIMB Group Holdings Bhd rose as much as 2% on Tuesday morning on news that the financial services provider is acquiring Royal Bank of Scotland’s operations in Asia.

At 10.40am, CIMB was traded four sen higher at RM7.83 after touching an intraday high of RM7.96.

In a note, Credit Suisse said due to a lack of visibility on potential revenue upside for CIMB following the acquisition, Credit Suisse said investors “would at best be neutral on the deal”.

However, Credit Suisse said the timing of the deal is good and that CIMB has a good acquisition track record so far.



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AirAsia gains on Credit Suisse report

AirAsia Bhd, the region’s biggest budget airline, rose the most in two weeks in Kuala Lumpur trading after Credit Suisse Group AG named it among 15 Asian equity “survivors” for 2012 in a report today.

Its shares gained 1.4 percent to RM3.73 at 9:16 a.m. local time, set for their biggest increase since Dec. 21. -- Bloomberg



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Analysts upgrade ratings on Tenaga

Tenaga Nasional Bhd may be in line for a payment of about RM2 billion (US$641 million) after the government and Petroliam Nasional Bhd agreed to share extra fuel costs that have driven the Malaysian utility into losses.

Tenaga received a letter from the government agreeing to a fuel-cost sharing mechanism, with extra costs of RM3.069 billion caused by a gas shortage to be split equally between the three, according to a statement from Tenaga yesterday. As the company’s financial situation is “critical,” it will liaise as soon possible with the other two parties to implement the agreement, it said.

“It’s a welcome relief,” Lim Tee Yang, a Kuala Lumpur-based analyst at RHB Capital Bhd, wrote in a report today. “The fuel cost mechanism indicates that the government is sympathetic to Tenaga’s troubles and will step in when necessary.” Lim raised his rating on Tenaga to “strong buy” from “underperform”.

Disrupted production at gas platforms owned by Petroliam Nasional, or Petronas, has forced state-controlled Tenaga to buy costlier oil and distillate fuel for electricity generation. This incurs additional costs of RM400 million every month, chief executive officer Che Khalib Mohamad Noh said on Oct 28.

Tenaga’s stock gained 1.4 per cent to RM5.76 at 9:42 a.m. in Kuala Lumpur trading.

Tenaga’s shares were upgraded to “buy” from “hold” at Maybank-Kim Eng, which cited an improvement in its balance sheet health. The stock was raised to “neutral” from “underperform” at Credit Suisse Group AG, which increased its estimate for Tenaga’s profit for the year through August by 87 per cent.

Tenaga is facing higher costs from running plants on alternative fuels and from importing electricity from Singapore and Thailand, yesterday’s statement said. The extra costs covered by the fuel-cost sharing mechanism were incurred between Jan 1 last year and Oct 31 this year, it said.

“Although the compensation mechanism is a positive development for Tenaga, the deal only covers for costs up to October 2011,” Annuar Aziz and Tan Ting Min, Kuala Lumpur-based analysts at Credit Suisse, wrote in a report. “We remain concerned as the gas shortage is expected to persist.” -- Bloomberg



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Credit Suisse maintains Outperform on Ta Ann, ups TP to RM7.30

KUALA LUMPUR (Nov 23): Credit Suisse has maintained its Outperform rating on TA ANN HOLDINGS BHD [] at RM4.78 and upped its target price for the stock to RM7.30 (from RM6.96), and said it was raising Ta Ann’s net profit for FY11-12E by 25-38% to reflect stronger-than-expected oil palm PLANTATION [] contributions.

In a note Wednesday, Credit Suisse said that there was still no clarity in terms of the timing of Japanese reCONSTRUCTION [].

Timber companies are now looking towards Mar/Apr 2012 for reconstruction activity to commence while the most bearish are concerned that 2012 could be worse than 2011, it said.

“We expect plywood prices to remain on a downtrend for the rest of 2011, as the surge in Japanese plywood imports has so far not been matched by any reconstruction demand.

“We expect log prices to remain firm, as we go into the rainy season which could potentially crimp log supply through early 2012.

Credit Suisse said as and when reconstruction activity kicks off in Japan, this would likely be positive for plywood prices and act as a positive catalyst for Ta Ann.

“The risks to our call include any potential delay in reconstruction activity in Japan or a strong ringgit,” it said.



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