ECM Libra posts RM53.8m pre-tax profit

KUALA LUMPUR (March 28): ECM Libra Financial Group Bhd posted a lower pre-tax profit of RM53.8 million for the financial year ended Jan 31, 2012, compared to RM86.7 million last year.

In a filing to Bursa Malaysia here on Wednesday, the company said revenue decreased to RM178.3 million from RM218.3 previously.

During the year, net interest income rose to RM36.2 million from RM29.5 million as the group's investment bank subsidiary maintained a strong capital adequacy ratio of 51 per cent, one of the highest in the banking industry.

The company's shareholders funds had crossed the RM1 billion mark, ECM Libra said.

The company has recommended a final single tier dividend of 2.4 sen per ordinary share, representing a dividend pay-out ratio equivalent to 63 per cent of net profit for the year. - Bernama



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Kenanga nears pact to buy ECM Libra

K&N Kenanga Holdings Bhd, the Malaysian brokerage backed by Deutsche Bank AG, is close to an agreement to buy the investment banking and broking unit of ECM Libra Financial Group Bhd for about RM900 million, according to three people familiar with the matter.

Kenanga may pay in cash and stock, two of the people said today, declining to be identified as the information is private. The sale won’t include ECM Libra’s asset management operations, they said.

Malaysian banks and brokerages have been merging amid increased competition from foreign lenders including Bank of China Ltd and Sumitomo Mitsui Banking Corp. Hong Leong Bank Bhd acquired EON Capital Bhd for US$1.7 billion in May, while RHB Capital Bhd is seeking central bank approval to buy OSK Holdings Bhd's investment bank.

Kenanga’s head of group corporate affairs Siti Maslinda Sheikh Othman wasn’t immediately available to comment. ECM Libra spokeswoman Maureen Jeyasooriar declined to comment on the sale. Kenanga’s board is expected to meet later today to approve the deal, one person said.

The sale will help Azman Hashim, ECM Libra’s biggest shareholder, meet Malaysian licensing rules that bar a single individual from being a key owner of more than one investment bank. Azman, who owns 24 per cent of ECM Libra, also indirectly holds almost 17 per cent of AMMB Holdings Bhd, Malaysia’s fifth- biggest lender by market value, according to data compiled by Bloomberg. -- Bloomberg



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

ECM Libra’s 3Q earnings drop 75% on higher expenses

KUALA LUMPUR: ECM Libra Financial Group Bhd’s net profit for 3QFY11 ended Oct 31 fell 75.7% to RM1.71 million from RM7.06 million a year earlier. This is mainly due to higher operating expenses, share of loss of an associated company, impairment allowance for bad and doubtful debts as well as losses on loans and advances.

Revenue rose marginally to RM45.65 million during the quarter from RM43.29 million a year ago, while earnings per share dropped to 0.21 sen from 0.87 previously. No dividend was declared during the quarter.

For 3Q, ECM Libra reported an impairment allowance for bad and doubtful debts of RM400,000 and a share of loss of an associated company of RM900,000.

“The group’s fundamentals and financial position remain strong and are expected to show satisfactory performance in the current financial year,” it said in an announcement to Bursa Malaysia yesterday.

For the nine months ended Oct 31, ECM Libra saw its net profit rise 58% to RM30.66 million from RM19.37 million a year earlier on a 24% increase in revenue to RM138.11 million from RM111.15 million. Earnings per share increased to 3.74 sen from 2.39 sen previously.

The counter closed unchanged at 80 sen yesterday with a total of one million shares changing hands, which gave it a market capitalisation of some RM664.7 million. The closing price is a 33.9% discount to its net assets per share of RM1.21 as at Oct 31.

The recent quarterly results are in stark contrast to ECM Libra’s stellar second quarter results in which it saw its net profit jump 189.12% to RM14.62 million from RM5.06 million a year earlier. This was driven partly by net brokerage income of RM10.5 million, fee income of RM5.7 million, net gain from trading and investment securities of RM8.4 million, net interest income of RM8.4 million as well as a writeback of impairment allowance of RM5 million from a legacy pre-merger account.

The Edge Financial Daily reported on Dec 1 that ECM Libra’s investment banking unit is believed to be an acquisition target of K&N Kenanga Holdings Bhd. It is learnt that the proposed acquisition that is currently being explored is a cash deal. Speculation that both parties were exploring M&A had been in the market as early as the first half of the year.

In April, The Edge weekly, quoting sources, reported that both parties were exploring a merger.


This article appeared in The Edge Financial Daily, December 15, 2011.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

ECM Libra declines on Q3 income tumble

ECM Libra Financial Group Bhd, a Malaysian stockbroker and corporate finance company, dropped to the lowest level in two weeks in Kuala Lumpur trading after third-quarter net income tumbled 76 percent to RM1.7 million.

The stock lost 1.3 percent to 79 sen at 9:17 a.m. local time, set for the lowest close since Nov. 30. -- Bloomberg


Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Bullish sentiment on Bursa set to continue

KUALA LUMPUR: Stocks are expected to continue to trade higher this week, with the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI) trying to break the psychological 1,500 mark for the first time in more than three months.

The overall improving sentiments are mainly driven by a coordinated move by major central banks to ease Europe's debt crisis, the greater clarity provided by European policy makers on plans to stabilise the debt situation, as well as encouraging economic data from the US.

Meanwhile, closer at home, speculation of DRB-HICOM Bhd's possible acquisition of major stakes in Proton Holdings Bhd, possible mergers between ECM Libra Financial Group and K&N Kenanga Holdings, as well as Petronas' plans to build its third natural gas terminal in Lumut, will keep investors excited for the week.

"Investors' confidence has significantly improved over the past few trading days, and is expected to stay strong over the near term. This may be the beginning of a year-end rally," said a head of research from a local brokerage.

Analysts expect the immediate resistance level for the benchmark index at about 1,500 level, while the near-term support level is around the 1,470 level.

The FBM KLCI ended four consecutive weeks of losses with a 4.01 per cent gain last week at 1,489.02. It was also the index's highest weekly gain since July 2009.

Last week, the entire market capitalisation of the stock market rose by some RM30 billion to RM1.27 trillion, from RM1.24 trillion the week before.

The gains were partly driven by improving sentiments among foreign fund managers, who boughtalmost RM3 billion and sold RM1.76 billion worth of stocks, resul-ting in a net buying of more than RM1.17 billion.

Last week, the US Federal Reserve and five other central banks lowered the cost of dollar funding to ease Europe's debt crisis, while China reduced the amount of cash that banks must set aside as reserves for the first time since 2008. The reserve ratios will decline by 50 basis points starting today.

Meanwhile, data revealed that payroll gains in the US improved last month, and jobless rate was down to 8.6 per cent, its lowest level since March 2009.

This week, stocks that will be in investors' radar, among others, include Proton and DRB-HICOM on speculation of possible corpo-rate exercise; Glomac Bhd on its 50 per cent jump in second quarter net profit; as well as Tan Chong Motor Holdings Bhd, which a weekly publication reported that its Vietnam venture may reach break-even earlier than expected.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

ECM Libra up on news of sale of IB

KUALA LUMPUR: ECM Libra Financial Group Bhd’s price and trading volume increased sharply yesterday on the news that K&N Kenanga Holdings Bhd is looking to acquire its investment banking business.

ECM Libra’s share price closed two sen higher at 80 sen, reaching an intraday high of 82 sen with 2.12 million shares traded.

Yesterday’s trading volume was 3.5 times more than Wednesday’s 596,100 shares and 91.1% higher than the 30-day average volume of 1.11 million shares.

Meanwhile, Kenanga’s shares were largely unchanged, falling only half a sen to 69.5 sen on a thin volume of 34,600 shares.

The Edge Financial Daily had reported yesterday that the two groups have been given the go-ahead by Bank Negara to proceed with the transaction which will be settled in cash.

According to sources, ECM Libra, which will end up cash-rich after the disposal, will be seeking to acquire a new business.


This article appeared in The Edge Financial Daily, December 2, 2011.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

ECM Libra IB sale back on?

KUALA LUMPUR: K&N Kenanga Holdings Bhd has cleared the first hurdle to acquiring ECM Libra Financial Group Bhd’s investment banking unit after receiving the go-ahead from Bank Negara Malaysia (BNM) some three weeks ago, according to sources.

After months of speculation, sources told The Edge Financial Daily that Kenanga will only be acquiring ECM Libra’s investment banking unit rather than the entire listed entity.

The sources said the consideration will be in cash. This will make ECM Libra a cash-rich entity, and enable it to pursue new business interests.

In the current global economic conditions, ECM Libra may be able to acquire new businesses at depressed prices, but what businesses the company might be looking at is not known.

An analyst noted that ECM Libra is increasingly acting like an asset management company, having made substantial investments in companies such as AirAsia Bhd and Eastern & Oriental Bhd.

It is learnt that BNM had approved the application towards the end of October and both parties are currently awaiting a decision by the Securities Commission (SC) pending several minor details. If all goes according to plan, negotiations will commence as soon as the regulatory approvals are secured.

If negotiations are successful, shareholder approval will be needed from both groups to finalise the acquisition. The whole process could be completed as early as 1Q next year.

Sources also revealed that BNM had received the merger and acquisition (M&A) application from the two groups sometime in late September to October.

This was roughly two to three months after The Edge had reported in July that merger talks were stalled due to issues relating to pricing and non-performing loans.

Earlier in April, The Edge had reported that the two companies were exploring a potential merger.

It was widely known at the time that Tan Sri Azman Hashim was looking to exit his position in ECM Libra as under the Banking and Financial Institutions Act, an individual is not allowed to hold substantial stakes in more than one financial institution.

Azman had a deemed interest of 23.85% (as at April 6) in ECM Libra, as stated in its 2011 annual report, and a 16.78% indirect stake (as at July 30) in AMMB Holdings Bhd, as noted in its 2011 annual report.

ECM Libra’s disposal of its investment banking business should remove the onus on Azman to sell down his stake in ECM Libra.

The co-founders of ECM Libra, Lim Kian Onn and Datuk Seri Kalimullah Masheerul Hassan have a 9.62% and 3.95% stake in the company respectively.

ECM Libra’s net profit for its 2Q ended July 31 saw a stellar improvement of 189.12% to RM14.62 million from RM5.06 million in the quarter last year.

Cahaya Mata Sarawak Bhd (CMS) is Kenanga’s largest shareholder with a 25.07% stake followed by Deutsche Asia Pacific Holdings Pte Ltd and Tengku Noor Zakiah Tengku Ismail with a 16.55% and 7.5% stake respectively.

Kenanga saw a major improvement for 2Q ended June 30, returning to the black with a net profit of RM5.58 million compared to a loss of RM21.49 million in the corresponding period last year.

Earnings for the potential acquirer have been volatile, having suffered a loss for the year ended Dec 31, 2010 of RM50.63 million due to a huge impairment of loans amounting to RM88 million.

ECM Libra’s shares shed 1.5 sen to close at 78 sen on the back of 596,100 shares traded while Kenanga rose two sen to 70 sen on thin volume of 25,600 shares.


This article appeared in The Edge Financial Daily, December 1, 2011.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

'Kenanga in talks to buy ECM Libra arm'

K&N Kenanga Holdings Bhd, a Malaysian brokerage, is in talks to buy the investment banking and broking operations of local rival ECM Libra Financial Group Bhd, two people familiar with the matter said.

ECM Libra, which has a market capitalization of RM669 million (US$213 million), would retain only its asset management business after the sale, one person said, declining to be identified as talks are private. That unit accounted for about 3 percent of ECM Libra’s revenue in the quarter ending July 31.

The sale would help Azman Hashim, ECM Libra’s biggest shareholder, meet Malaysian central bank licensing rules that bar a single individual from being a key owner of more than one investment bank. Azman, who owns 24 per cent of ECM Libra, also indirectly holds almost 17 per cent of AMMB Holdings Bhd, Malaysia’s fifth-biggest lender by market value, according to data compiled by Bloomberg.

Kenanga is Malaysia’s eighth-biggest equities broker by trading volume, while ECM Libra is No. 10, according the stock exchange’s website. Kenanga spokesman Siti Maslinda Sheikh Othman wasn’t immediately available to comment. ECM Libra spokeswoman Maureen Jeyasooriar declined to comment on the deal.

ECM Libra rose 3.2 per cent to 80.5 sen at the mid-day break in Kuala Lumpur trading today after the Edge Financial Daily reported on the possible sale. Kenanga was unchanged at 70 sen, while the benchmark FTSE Bursa Malaysia KLCI Index climbed 1.5 per cent.

Book Value

Banks in Southeast Asia are engaging in a wave of mergers. RHB Capital Bhd, Malaysia’s sixth-biggest bank by market value, is in talks to take over local rival OSK Holdings Bhd’s investment banking unit. Malayan Banking Bhd, the country’s largest lender, acquired Singapore’s Kim Eng Holdings Ltd in May for S$1.79 billion (US$1.4 billion).

ECM Libra is seeking payment in cash of as much as 1.6 times the investment banking operation’s book value, one of the people said. Including the asset management business, ECM’s common equity stood at RM1 billion at the end of July, according to Bloomberg data.

Should the sale go through, ECM Libra will decide whether to return the proceeds to shareholders or acquire a new business, one person said. Kenanga has yet to receive regulatory approval for the acquisition from the central bank and the securities regulator, the people said.

Deutsche Asia Pacific Holdings Pte holds a 16.6 per cent stake in Kuala Lumpur-based Kenanga, according to the company’s website. The company’s biggest shareholder is CMS Capital Sdn Bhd, with a 25.1 per cent stake. -- Bloomberg



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

HDBSVR: Wall St rally to push KLCI towards 1,475

KUALA LUMPUR (Dec 1): Hwang DBS Vickers Research expects market sentiment to be buoyed by the positive overseas developments on Wednesday night.

On Wall Street, key U.S. equity bellwethers jumped between 4.2% and 4.3% at the closing bell after central banks in the US, Europe, UK, Canada, Japan and Switzerland took coordinated actions to lower the cost of US dollar borrowings.

“Such a powerful rally on Wall Street will surely reverberate across Asia today. Back home, the benchmark FBM KLCI will likely build on its two-day cumulative gains of 40.6-point or 2.8%, possibly overcoming the immediate resistance level of 1,475 ahead,” it said.

HDBSVR said looking to rise in tandem with the broad market today are index-linked laggards like Sime Darby, Public Bank and Tenaga.

Meanwhile, smaller cap companies such as ECM Libra (on news that its investment bank business would be acquired by K&N Kenanga) and PJI Holdings (after securing contracts worth RM60 million) may benefit from an increase in buying interest too.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

CIMB Research has technical buy on ECM Libra at 82.5 sen

KUALA LUMPUR (Nov 18): CIMB Equities Research has a technical buy on ECM Libra Financial Group at 82.5 sen at which it is trading at a price to book value of 0.7 times.

It said on Friday ECM Libra’s share price is trying to push above its downward slopping resistance trend line on Thursday (now at 84.5 sen).

“If it succeeds, there is a good chance that the candles may charge towards 90 sen and 95.5 sen.

“However, only risk takers should look at this stock. This is because selling pressure could pick up if prices fail to push above the 84.5 sen level soon. For investors with lower risk appetite, wait for prices to move above 84.5 sen before going long,” it said.

CIMB Equities Research said the MACD signal line has moved back into the positive territory. RSI too is above the 50pts mark. Put a stop at below 80 sen.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.