Stocks to watch: Sin Heng Chan, Ramunia, MMC, asiaEP

KUALA LUMPUR (March 13) : Malaysian stocks could encounter downward pressure on Wednesday as investors turned cautious on the technical dynamics of the local market. Analysts believe any gains on the FBM KLCI could be stifled by profit taking amid a downside bias perception on the local benchmark.

In a note on Tuesday, Hong Leong Investment Bank Bhd research head Low Yee Huap said the research firm had changed its stance from positive to cautious as it foresees more profit taking consolidation in the local stock market.

Low said “the bears look stronger now” against a backdrop of weaker technical readings in the FBM KLCI.

On Tuesday, anticipation of better US retail sales numbers had spurred Asian stock markets and crude oil prices. Notable gainers include Hong Kong’s Hang Seng which rose 0.97% to close at 21,339.7 points and Australia’s S&P / ASX 200 which climbed 1.21% to 4247.62 while Taiwan’s Taiex was up 1.31% to 8031.51.

Malaysia’s FBM KLCI of 30 blue chip stocks which rose as much as 0.3% to an intraday high of 1569.15 points, however pared earlier gains to settle with a 0.73 point loss to 1564.02 points.

Stocks to watch on Wednesday include Sin Heng Chan (M) Bhd, RAMUNIA HOLDINGS BHD [], MMC CORPORATION BHD [],asiaEP Resources Bhd, Lafarge Malayan Cement Bhd , GEFUNG HOLDINGS BHD [] and YTL Corp Bhd.

Shares of Sin Heng Chan surged on Tuesday, prompting a query from Bursa Malaysia securities over the unusual market activity.

Its share price closed up 29.5 sen to RM1.10 with 8.48 million units done. However, the company said it was unaware of any reason for the unusual market activity.

Ramunia’s unit has secured a RM23.62 million contract from Aquaterra Energy Ltd to fabricate two wellhead support structures.

Gas Malaysia Bhd is seeking a further extension of six months until Oct 6 from the Securities Commission to complete the proposed listing exercise. MMC Corporation said Gas Malaysia had applied to the SC for its approval for the six-month extension.

West River Capital Sdn Bhd (WRC) has rejected TSM GLOBAL BHD []’s request for better offer terms including the price and this has seen the latter resolving to consider other offers.

TSM said WRC’s offer price would remain at RM1.25 per share.

asiaEP’s major shareholder Tian Ee Intertrade Sdn Bhd has made a requisition for an EGM following the company’s decision to terminate its planned private placement, the firm said in statement to Bursa Malaysia on Tuesday. asiaEP shares rose 0.5 sen to close at nine sen.

RHB Research Institute has upgraded LAFARGE MALAYAN CEMENT BHD [] from an underperform to market perform and revised upwards its fair value by 25% from RM5.94 to RM7.43. The research house has also raised its earnings forecast for the cement producer by between 3% and 21% for FY12 to FY14 period. Lafarge shares rose five sen to RM7.26.

Bahamas-based Golden Knights International Ltd emerged a a major shareholder in marble products manufacturer Gefung Holdings Bhd with a 5.11% stake. This follows Golden Knights’ acceptance of its entitlement from Gefung’s rights issue. Gefung shares added one sen to 17.5 sen

YTL Corp Bhd saw heavy trading after its unit YTL Communications Sdn Bhd was reported to be in the midst of implementing the 1Bestarinet project in government schools. The initiative involves the setting up of Internet access to enable virtual learning environment in public schools. Shares of YTL Corp were up two sen to RM1.68 with some 21 million shares done.



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Gas Malaysia seeks 6-month extension until Oct 6 for listing

KUALA LUMPUR: Gas Malaysia Bhd is seeking a further extension of six months until Oct 6 from the Securities Commission to complete the proposed listing exercise.

MMC CORPORATION BHD [] said on Tuesday that Maybank Investment Bank Bhd had, on behalf of Gas Malaysia, submitted an application to the SC for its approval for the six-month extension.

“Notwithstanding the above and as announced on Feb 17, 2012, MMC Corp was advised by Gas Malaysia that the proposed listing is expected to be completed by the second quarter of 2012,” it said.



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Petronas ups gas supply to Gas Malaysia under new deal

KUALA LUMPUR (Feb 23): Petroliam Nasional Bhd will increase the natural gas supply to Gas Malaysia Bhd to 534,143 Gigajoule (492 million standard cubic feet per day (MMScfd) ).

The agreement, which was signed on Thursday, is for 10 years from Jan 1, 2013 has an option for it to be extended by another five years.

“The new gas supply agreement will replace the existing gas supply agreement which will expire on Dec 31, 2012 for a total gas supply of 382 MMScfd.

“The contract is aimed at providing a long term supply security of natural gas to Gas Malaysia’s existing customers, while the additional 110 MMScfd will enable Gas Malaysia to expand its supply to new customers,” said Gas Malaysia.

The agreement was signed by Petronas vice president, infrastructure and utilities Pramod Kumar Karunakaran and Gas Malaysia chairman Datuk Hamzah Bakar.



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HDBSVR: Buying interest in Malaysian stocks to resume

KUALA LUMPUR (Feb 20): HwangDBS Vickers Research (HDBSVR) said buying interest in Malaysian stocks could resume on Monday due to better external sentiment.

“If so, then the benchmark FBM KLCI may pull away from its immediate support level of 1,555 ahead,” it said on Monday.

HDBSVR said although Wall Street saw mixed closings last Friday – ending between -0.3% and +0.4% – the futures markets were up on Monday morning. The DJIA March futures contract was trading at a 56-point premium to the spot rate at 8.15am Malaysian time, lifted by hopes that Greece is on track to receiving international financial aid.

In terms of share price actions, oil & gas counters may be in the limelight, including:

(a) Tanjung Offshore, which could be a merger & acquisition target according to a business weekly report;

(b) SapuraCrest Petroleum, after entering into a joint venture in relation to the building, CONSTRUCTION [] and operation of three pipe-laying support vessels pursuant to a previously secured contract to charter and operate the three vessels at a contract value of US$1.4 billion; and

(c) MMC Corporation, following its announcement that the listing of its subsidiary Gas Malaysia would be delayed from 1Q12 to 2Q12.



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Stocks to watch: Shell, MMC, Sarawak Cable, Wing Tai

KUALA LUMPUR (Feb 18): Stocks on Bursa Malaysia could advance on Monday, Feb 20 following positive developments in Greece and China’s move to shore up the slowing economy.

Reuters reported late Saturday that Greece's cabinet tackled on Saturday how to implement austerity demanded by the EU and IMF as a 130-billion-euro (US $171-billion) rescue seemed within reach, while the euro zone considered modifying a deal with private creditors to help Athens reduce its huge debts.

In another development, China's central bank cut the amount of cash that commercial lenders must hold as reserves on Saturday for the second time in nearly three months, the latest step to shore up the slowing economy.

The People's Bank of China (PBOC) delivered a 50-basis-point cut in banks' reserve requirement ratio (RRR), effective from next Friday, Feb. 24, after repeatedly defying market expectations for such a move.

At Bursa Malaysia, stocks to watch include Shell Refining Company (Federation of Malaysia) Bhd, MMC CORPORATION BHD [], Sarawak Cable Bhd and Wing Tai Malaysia Bhd.

Shell Refining posted net losses of RM99.49 million in the fourth quarter ended Dec 31, 2011 compared to the net profit of RM114.66 million a year ago.

Shell attributed the losses due to weak refining margins which had also impacted the FY11 results, where it reported net losses of RM125.74 million.

MMC said on Friday the listing of its 41.8% owned Gas Malaysia Bhd on the Main Market of Bursa Malaysia Securities was delayed to the second quarter of 2012.

MMC said Gas Malaysia was “still in the midst of complying with the conditions imposed by the Securities Commission”.

Sarawak Cable has scrapped the MoU with Sinohydro Corporation (M) Sdn Bhd and KEC International Ltd to develop transmission lines in Sarawak.

This latest development could possibly see Sarawak Cable going alone to undertake the project.

On Aug 17, 2011, the three parties had signed the MoU to prepare and submit proposals for the project.

Meanwhile, Wing Tai Malaysia Bhd saw its major shareholder increasing its stake to 61.07% or 191.218 million shares with the recent acquisition of 2.20 million shares on Feb 17.

The Edge Malaysia reports that Century Logistics ahs put the FSU setback behind it. The service provider is confident of matching its 2010 record performance this year despite a minor setback with its floating storage units in 2H2011.

S P Setia Bhd reported that the Securities Commission has declined a ruling application sought by the joint offerors of S P Setia – Permodalan Nasional Bhd and S P Setia president and CEO Tan Sri Liew Kee Sin.

The joint offerors had decided not to appeal. However, the decision would not impact the joint offer.



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Listing of Gas Malaysia delayed again to 2Q

KUALA LUMPUR (Feb 17): The listing of Gas Malaysia Bhd on the Main Market of Bursa Malaysia Securities has been delayed again and the listing is now expected to be in the second quarter of 2012.

MMC Corp, which owns 41.8% of Gas Malaysia, said the latter was “still in the midst of complying with the conditions imposed by the Securities Commission” for the proposed listing as stated in the Oct 7, 2011 approval letter.

“Barring any unforeseen circumstances, the proposed listing which was earlier expected to be completed by the first quarter of 2012, is now envisaged to be completed by the second quarter of 2012,” it said.

The Edge Financial Daily reported in November 2011, that the listing, originally planned for the fourth quarter, of that year would likely be postponed to the first quarter of 2012.

According to a previous announcement by MMC, one of the SC’s conditions was Gas Malaysia should ensured that its petrol stations are not built on land that is not designated for the purpose and for the company to rectify any non-compliance within a year of SC’s approval.

Gas Malaysia announced on Oct 19 that it had received the approval from the Economic Planning Unit for its listing, changes in shareholding structure and a proposed issuance of special redeemable preference shares to Petronas.

The company’s IPO comprises 333.84 million ordinary shares of 50 sen each. MMC officials had said the IPO could be set at RM2.20 per share.



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Gas Malaysia listing delayed to 1Q12

KUALA LUMPUR: The listing of Gas Malaysia Bhd, originally planned for the current quarter, may be postponed to early next year as the company has yet to fulfill certain conditions set by the Securities Commission (SC), sources said.

The SC had on Oct 7 granted conditional approval for the proposed listing on the Main Market of Bursa Malaysia. Among the conditions is a requirement that the company executes a new gas supply agreement with Petroliam Nasional Bhd (Petronas).

Additionally, the terms and conditions of the new gas supply agreement must not have a material adverse impact on the operations and future profitability of Gas Malaysia.

“But an agreement has not been concluded with Petronas yet as the new agreement includes the provision for Gas Malaysia to set up a chain of petrol outlets to cater for vehicles utilising gas,” said a source.

According to a previous announcement by MMC Corp Bhd, one of the conditions stipulated by the SC is Gas Malaysia ensures that its petrol stations are not built on land that is not designated for the purpose and for the company to rectify any non-compliance within a year of SC’s approval.

MMC, which owns a 41.8% stake in Gas Malaysia, had said it was en route to list the subsidiary by year-end. This is dependent on fulfilling conditions set by the SC.

Towards this end, Gas Malaysia announced on Oct 19 that it had received the approval from the Economic Planning Unit for its listing, changes in shareholding structure and a proposed issuance of special redeemable preference shares to Petronas.

The company’s IPO comprises 333.84 million ordinary shares of 50 sen each. MMC officials had said the IPO could be set at RM2.20 per share.

“We think we are going to get that price for a few reasons, such as the company’s performance and by benchmarking it against other similar companies,” said an official at the MMC EGM on Oct 31.

The proposed listing of Gas Malaysia is one of the two IPOs to have received approvals from the SC in the second half this year.

iDimension Consolidated Bhd, which provides manufacturing software solutions, was listed on the ACE Market earlier this month. Its IPO consisted of 38.23 million new shares of 10 sen each, sold at an offer price of 38 sen, along with seven million shares via private placement. It had raised RM14.5 million from the exercise.

Following the listing, iDimension had announced a dividend and a bonus issue. Despite that, iDimension is trading at about 28 sen, lower than its IPO price.


This article appeared in The Edge Financial Daily, November 25, 2011.



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MMC ready for Gas Malaysia IPO

MMC Corp Bhd (Nov 17, RM2.51)
Maintain trading buy at RM2.52 with revised fair value of RM3.65 (from RM3.47): Following our meeting with management and our Invest Malaysia Hong Kong 2011 event, we note that the Port of Tanjung Pelepas (PTP) has been growing at a stronger-than-expected 15.5% year-to-date in terms of volume, while Johor Port has secured a tariff hike after a 20-year wait and the double-tracking project remains on track.

With numerous large IPO such as Pavilion REIT and Felda Global hogging investor attention, MMC should not be left out in the cold in view of the upcoming Gas Malaysia Bhd IPO. The proposed IPO has secured approvals from Bursa Malaysia, MMC shareholders and the Economic Planning Unit.

All that is holding it back now is the condition requiring Gas Malaysia to sign a new gas supply agreement with Petronas. We understand demand from investors at the indicative IPO price of RM2.20 per share has been strong.

We build into our assumptions: (i) that MMC raises RM307 million from the sale of its 10.9% stake in Gas Malaysia and uses it to pare down its borrowings; (ii) Gas Malaysia’s share price settles at RM2, which we build into our sum-of-parts valuation for MMC. This will lift our earnings forecasts by 3% for 2012 and 4% for 2013 as the finance cost savings offset minority interest leakage.


Our sum-of-parts fair value is lifted to RM3.65 and we maintain our “trading buy” call, noting that much depends on the listing of Gas Malaysia. — OSK Research, Nov 17


This article appeared in The Edge Financial Daily, November 18, 2011.



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Gas Malaysia on track for 4Q listing, says MMC

KUALA LUMPUR: MMC Corp Bhd is on track to list its subsidiary Gas Malaysia Bhd by December despite market volatility and global economic uncertainty dampening investor sentiment.

MMC finance director Anwar Syahrin Ajib told reporters yesterday that the group is still sticking to its year-end target to list Gas Malaysia though the deal is dependent on fulfilling certain conditions imposed by the Securities Commission (SC) and wider market conditions.

Anwar also said Gas Malaysia’s IPO could garner up to RM2.20 per share, which was the top end of its indicative offer price range.

“We think we are going to get that price for a few reasons, such as the company’s performance and by benchmarking it against other similar companies,” Anwar said after the MMC EGM yesterday.

MMC shareholders voted in favour of the proposed listing of Gas Malaysia.

Its chairman Datuk Wira Syed Abdul Jabbar Syed Hassan said Gas Malaysia’s listing is expected to attract attention despite market conditions as investors would be looking to mop up the shares for dividend yield.

Syed Abdul Jabbar also said the prospectus is scheduled to be launched late this month.

Anwar (left) and Syed Abdul Jabbar after the EGM yesterday.

Anwar and Syed Abdul Jabbar declined to comment on the future listing of the group’s other units, Malakoff Bhd and Johor Port Bhd.

To recap, the SC had on Oct 7 granted conditional approval for Gas Malaysia’s proposed listing on the Main Market with several conditions. The first is that Gas Malaysia is to execute a new gas supply agreement with Petroliam Nasional Bhd (Petronas) prior to the registration and issuance of its listing prospectus.

Additionally, the terms of the new agreement must not have a material adverse impact on Gas Malaysia’s business operations and future profitability.

Second, the SC requires Gas Malaysia to rectify any non-compliance with regard to petrol stations built on land not designated for such use within 12 months from the date of the SC’s letter of approval for the listing.

The third condition is that Gas Malaysia is to allocate at least 12.5% of its enlarged issued and paid-up share capital to bumiputera investors at the point of listing.

Gas Malaysia’s shareholders are MMC-Shapadu Holdings Sdn Bhd (55%), Tokyo Gas-Mitsui & Co Holdings Sdn Bhd (25%), Petronas Gas Bhd (20%) and Petronas, holding one special share.

To facilitate the listing, Gas Malaysia shares will be subdivided to increase the company’s paid-up capital from 642,000 shares to 1.284 billion shares. Its shareholders will then offer for sale 333.84 million shares, representing 26% of Gas Malaysia’s enlarged paid-up capital.

Some 303.49 million shares (23.64%) will be offered to institutional investors and bumiputera institutional investors while the remaining 30.34 million shares (2.36%) will form the retail offering portion for the public and eligible directors and employees.


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

Gas Malaysia IPO may be priced at RM2.20

MMC Corp, a Malaysian power and ports company, said its Gas Malaysia Bhd unit may sell shares at RM2.20 apiece in an initial public offering.

The total net proceeds to be accrued to MMC is estimated at RM300.9 million, Kuala Lumpur-based MMC said in a statement last night.

MMC’s effective stake in Gas Malaysia will be diluted to 30.9 percent from 41.8 percent after the IPO, it said. -- Bloomberg

MMC targets Gas Malaysia IPO price RM2.20 per share

KUALA LUMPUR (Oct 31): MMC Corp Bhd is on track to list its subsidiary, Gas Malaysia Bhd, by December this year despite market volatility and global economic uncertainty putting a dampener on markets.

MMC finance director Anwar Syahrin Ajib said on Monday that Gas Malaysia’s initial public offering (IPO) could be RM2.20 per share, which was the top end of the indicative offer price.

"We think we are going to get that price for a few reasons like the performance of the company and benchmark against other similar companies," Anwar told reporters after MMC's extraordinary general meeting (EGM) here.

MMC chairman Datuk Wira Syed Abdul Jabbar Syed Hassan said the Gas Malaysia listing was expected to attract investor attention despite market conditions as investors would be looking to mop up the shares for dividend yield.

The two MMC officials however declined to comment on the future listing of the group's units, Malakoff Bhd and Johor Port Sdn Bhd.

At the EGM, MMC shareholders approved the group's proposed listing of Gas Malaysia.