IGB to ink MoU for Johor JV property project

KUALA LUMPUR (March 28): IGB Bhd plans to build a retail mall and or mixed development in Johor Bahru under a proposed joint venture with Selia Pantai Sdn Bhd.

It said on Wednesday it would be signing a non-binding MoU with Selia Pantai for a 70:30 joint venture to acquire and develop three pieces of leasehold land for the projects.

“The MoU sets out the understanding and intention of the parties in respect of the proposed JV. The MoU shall remain valid for 30 days except as otherwise mutually agreed in writing by the parties,” IGB said.



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Quality of buying declines on Bursa

KUALA LUMPUR (March 20): The quality of buying in the morning session on Tuesday declined, with trading interest focused on penny stocks, while the broader market showed some signs of weakness.

Investors were staying on the sidelines, as evidenced by the small gains and cautious regional markets. Most of the most active stocks were penny counters.

At 12.30pm, the FBM KLCI was up 3.48 points to 1,577.08. Turnover was 1.28 billion shares valued at RM676.65 million. Decliners led advancers 382 to 245 while 333 counters were unchanged.

Hong Kong’s Hang Seng Index slipped 0.67% to 20,974.03, Taiwan’s Taiex shed 0.69% to 7,988.42, South Korea’s Kospi 0.26% lower at 2,041.59 but Singapore’s Straits Times Index added 0.58% to 3,006.53. Japan was closed.

At Bursa Malaysia, dealers said retail investors were staying on the sideline while some who had already bought blue chips and mid-cap stocks were awaiting fresh news. They said the retail investors were not ready to rush in.

According to Bursa Malaysia, local retail participation had declined to about 26%, local institutions were at 54.6% and foreigners at about 19.4%.

Focus, which was queried by Bursa Securities over the sharp rise and heavy volume, added 3.5 sen to 23 sen. There were 112.93 million shares done. It warrants, WA added 4.5 sen to 8.5 sen and WB 2.5 sen to 15 sen.

Dutaland-LB added 15 sen to RM1.05, BCorp-LR 15.5 sen to 13 sen. Index-linked stock BAT rose 14 sen to RM52.52, HLFG 10 sen to RM11.98 and PetGas eight sen to RM16.48.

Ta Ann added 12 sen to RM5.87, PIE 11 sen to RM4.88 and IGB seven sen to RM2.87.

Share prices of Metronic Global and its 17%-owned unit Ariantec Global slipped in active trade. Ariantec fell three sen to 10.5 sen and it was the most active with 121.23 million shares done while Metronic eased one sen to 12 sen.

HL Industries was the top loser, down 12 sen to RM4.06, Batu Kawan and United PLANTATION []s shed 10 sen each to RM18.40 and RM25. EPMB extended its decline, down 6.5 sen to 90 sen.



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CIMB Research has technical sell on IGB at RM2.80

KUALA LUMPUR: CIMB Equities Research has a technical sell on IGB Corporation at RM2.80 at which it is trading at a price-to-book value of 1.2 times

It said on Tuesday IGB Corporation broke below its support trend line a week ago but found some support via its 50-day SMA. The current rebound looks weak and could potentially fizzle out soon.

“Technical landscape remains conductive for a correction as its MACD remains in a falling trend,” it said.

CIMB Research said any rally towards the RM2.88 resistance should be viewed as a chance to sell at a higher price.

“A break below RM2.68 would confirm that the longer term trend has also changed with prices targeting RM2.40 and RM2.23 next. As long as the RM2.93 high is not breached, the odds favour the bears,” it said.



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CIMB Research has technical buy on IGB at RM2.63

KUALA LUMPUR (Jan 16): CIMB Equities Research has a technical buy on IGB Corporation at RM2.63 at which it is trading at a price-to-book value of 1.2 times.

It said on Monday that IGB broke out of its triangle pattern on Friday.

“Looking at the chart, we think the recent consolidation is probably at its tail-end. If the candles can continue to hold on above the resistance-turned-support channel (now at RM2.57), the bulls would likely lift prices towards RM2.77 and RM2.92 next,” it said.

CIMB Research said the technical landscape remains conducive. MACD is hovering in the positive territory while RSI is above the 50pts mark. Moreover, the candles are trading above all its key moving averages.

“Risk takers may start to take some position here but always place a stop at below RM2.50. A crack below RM2.45 would imply that the stock is heading towards its 30-day and 50-day SMAs at RM2.34 and RM2.19 respectively,” it said.



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KLCI snaps losing streak, closes 0.68% higher

KUALA LUMPUR (Jan 5): The FBM KLCI snapped its losing streak on the third trading day of 2012 and closed in the positive territory for the first time in the New Year, lifted by gains at banking and select blue chip stocks.

The FBM KLCI gained 10.21 points to close at 1,514.43.

Gainers beat losers by 467 to 325, while 324 counters traded unchanged. Volume was 1.67 billion shares valued at RM1.46 billion.

However, whether the index would be able to sustain its gains on Friday remains uncertain as most Asian markets closed in the negative territory while European indices fell in early trade on Thursday.

At the regional markets, Hong Kong’s Hang Seng Index added 0.46% to 18,813.41, Taiwan’s Taiex gained 0.68% to 7,130.86 and Singapore’s Straits Times Index edged up 0.07% to 2,713.02.

Meanwhile, the Shanghai Composite Index fell 0.97% to 2,148.45, Japan’s Nikkei lost 0.83% to 8,488.71 while South Korea’s Kospi shed 0.13% to 1,863.74.

Concern about the appetite for euro zone sovereign debt pushed European stocks lower and hit the single currency on Thursday, with the first French bond auction of 2012 set to test how much progress policymakers have made in easing tensions, according to Reuters.

The price France has to pay to sell 7 to 8 billion euros of longer-term bonds will measure how much relief markets have taken from the EU leaders' December plan for resolving the crisis and the near half-trillion euros pumped into the region's banks by the European Central Bank, it said.

On Bursa Malaysia, KLK jumped RM1.76 to RM25.26, Dutch Lady gained RM1 to RM24, Can-One 31 sen to RM1.37, Nestle 30 sen to RM56.30, Timwell 28 sen to RM1.08, BHIC and Boxpak 26 sen to RM4.11 and RM2.52, Carlsberg and MISC 23 sen each to RM8.71 and RM5.96, while BLD PLANTATION []s was up 22 sen to RM7.60.

Among banking stocks, CIMB rose six sen to RM7.16, RHB Capital five sen to RM7.33, Affin seven sen to RM3.09, HLFG four sen to RM11.56, while Maybank and Public Bank gained two sen each to RM8.29 and RM13.16.

Decliners were led by RCI that lost 35 sen to RM1.45, BAT 14 sen to RM49.66, IGB 10 sen to RM2.48, Genting Plantations and IJM Corp eight sen each to RM8.60 and RM5.46, Malayan Flour Mills and WCT seven sen each to RM7.16 and RM2.18, while Mahajaya and AFG fell six sen each to 62 sen and RM3.89.

The actives included XDL, JCY, Proton, Versatile and Astral Supreme.



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KLCI starts 2012 in negative territory as rally fizzles out

KUALA LUMPUR (Jan 3): The FBM KLCI fell into negative territory on the first trading day of 2012 as the rally fizzled out and profit taking activities chipped off its gains made during the final week of 2011.

The 30-stock index fell 1.12% or 17.19 points to 1,513.54, weighed by losses at banking and key blue chips.

The broader market sentiment however was mixed with gainers leading losers by 446 to 325, while 278 counters traded unchanged. Volume was 1.6 billion shares valued at RM1.41 billion.

Meanwhile, better-than-expected data from China's giant manufacturing sector boosted global stocks and the euro on Tuesday and pushed safe-haven bets like German bonds lower, according to Reuters.

Europe's debt crisis still clouds the outlook ahead of a daunting first quarter of borrowing which is expected to push the euro lower and undermine demand for the region's lower-rated sovereigns, it said.

Signs of improved growth in the United States may also cool any speculation about another round of money-printing by the Federal Reserve, improving the outlook for the dollar, it said.

At the regional markets, Hong Kong’s Hang Seng Index jumped 2.4% to 18,877.41, South Korea’s Kospi rose 2.69% to 1,875.41, Taiwan’s Taiex gained 1.46% to 7,053.38 and Singapore’s Straits Times Index added 1.59% to 2,688.36.

The China and Japan markets were closed today for holidays.

Banking stocks were among the major losers, with Maybank falling 24 sen to RM8.34, Public Bank down 22 sen to RM13.16, CIMB 20 sen to RM7.24, RHB Capital 17 sen to RM7.31, AMMB 15 sen to RM5.80 and Hong Leong Bank 14 sen to RM10.76.

Other losers included BAT that fell 48 sen to RM49.44, Petronas Dagangan 36 sen to RM17.44, Petronas Gas 30 sen to RM14.90, Nestle 20 sen to RM56, while JT International and PPB fell 18 sen each to RM7.21 and RM16.98.

Gainers included KLK that added 30 sen to RM23, Y&G 25 sen to RM1, Genting 24 sen to RM11.24, Hibiscus 22.5 sen to RM1.17, Glenealy, Toyo Ink, IGB and SOP up 20 sen each to RM6.22, RM1.80, RM2.66 and RM5.79, while KPower added 19.5 sen to 47 sen.

Meanwhile, the actives included Hibiscus, Maxbiz, XDL, JCY, Sanichi and DBE Gurney.



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Mild profit taking keeps KLCI in the red at mid-day

KUALA LUMPUR (Jan 3): The FBM KLCI remained in negative territory at the mid-day break on Tuesday, as mild profit taking and losses at banking stocks weighed on the index.

The FBM KLCI fell 12.88 points to 1,517.85 at the mid-day break, bucking the trend at key regional markets.

Gainers led losers by 330 to 293, while 276 counters traded unchanged. Volume was 818.82 million shares valued at RM584.83 million.

The ringgit strengthened 0.61% to 3.1498 versus the US dollar; crude palm oil futures for the third month delivery rose RM50 per tonne to RM3,220, crude oil gained US$1.44 per barrel to US$100.27 while gold jumped US$14.68 an ounce to US$1,580.95.

At the regional markets, Hong Kong’s Hang Seng Index jumped 2.05% to 18,812.69, South Korea’s Kospi was up 2.43% to 1,870.70, Taiwan’s Taiex added 1.68% to 7,068.94 and Singapore’s Straits Times Index rose 1.25% to 2,679.49.

The China and Japan markets are closed today for holidays.

On Bursa Malaysia, BAT was the top loser this morning and fell 50 sen to RM49.42; Petronas Dagangan fell 30 sen to RM17.50, Petronas Gas down 20 sen to RM15, Tahps 18 sen to RM4.10, PPB 16 sen to RM17 and JT International down 15 sen to RM7.24.

Among the banks, Public Bank fell 22 sen to RM13.16, CIMB and Maybank down 20 sen each to RM7.24 and RM8.38, RHB Capital lost 14 sen to RM7.34, AMMB 11 sen to RM5.84, Hong Leong Bank fell four sen to RM10.86 and Affin was down three sen to RM3.05.

PLANTATION [] stocks advanced after RHB Research maintained its Outperform call on the sector and said CPO prices could rise above expectations.

“Recently, several developments have led us to believe that the risk of CPO prices rising above market expectations is increasing, particularly in 1H2012, including: 1) The weather is now officially in La Niña territory; 2) Impact of La Niña on soybean supply is a high risk factor; 3) Any crop losses would have knock-on effects on CPO demand and prices; 4) Rising crude oil price and its close correlation with CPO prices; and 5) Continued narrowing of the price discount between CPO and other competing vegetable oils,” it said in a note Jan 3.

Among plantation counters, KLK rose 20 sen to RM22.90, United Plantations and Kulim 18 sen each to RM19.18 and RM4.40, Tradewinds Plantations 16 sen to RM4.50 and Batu Kawan eight sen to RM17.54.

Other gainers included IGB that rose 22 sen to RM2.68, Genting 20 sen to RM11.20, Aeon, LPI Capital and BHIC 16 sen each to RM7.40, RM13.68 and RM3.59, while Supermax was up 14 sen to RM3.97.

The actives included Hibiscus, JCY, MAS warrants, XDL, IRCB, Time and Proton.



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IGB to buy up Great Union Properties for RM277.5m

KUALA LUMPUR: IGB Corp Bhd has made a RM277.5 million cash offer to acquire the remaining 50% stake in Great Union Properties Sdn Bhd (GUP), which owns the Renaissance Kuala Lumpur Hotel, from Stapleton Developments Ltd (SDL) and Chong Kim Weng.

IGB, which currently owns 50% of GUP, will pay RM101.348 million and settle the shareholder’s advance of RM176.15 million in GUP.

Based on GUP’s audited financial statements for the financial year ended Dec 31, 2010 (FY10), GUP recorded earnings before interest, depreciation and tax (Ebitda) of RM24 million while its net assets were RM116.6 million.

IGB said SDL is a subsidiary of New World Development Co Ltd, which is listed on the Hong Kong Stock Exchange. Chong is a senior partner of Jeyaratnam & Chong, a legal firm in Malaysia from which IGB group procures legal advisory services from time to time.

“The total consideration is based on 8.5 times the hotel’s 2010 Ebitda which is equivalent to valuation of the hotel at RM710 million net of bank borrowings and shareholders’ loan.

“The total consideration will be satisfied wholly in cash from internally generated funds,” it said.

IGB had invested RM226 million in GUP, comprising subscription of 50 million RM1 shares between 1988 and 1992 and 100 million preference shares of 10 sen each (between 1993 and 1996) and shareholder’s advance of RM76 million.

“The total cost of investment in GUP post-proposed acquisition will be RM503 million,” it said. IGB said upon completion of the proposed acquisition, GUP would be a unit of IGB.

“As the controlling shareholder of GUP, IGB will have full management control and hence will be able to execute its business plans and strategies more effectively,” it said.


This article appeared in The Edge Financial Daily, December 20, 2011.


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KLCI drifts lower, sentiment cautious

KUALA LUMPUR (Dec 20): The FBM KLCI drifted lower on Tuesday on mild profit-taking, as Asian markets remained shaky despite edging upwards after the sharp selldown on Monday following the death of North Korean leader Kim Jong-il.

At the mid-day break, the FBM KLCI fell 5.14 points to 1,472.64. Losers led gainers by 352 to 274, while 277 counters traded unchanged. Volume was 849.18 million shares valued at RM509.99 million.

The ringgit weakened 0.25% to 3.1908 versus the US dollar; crude palm oil futures for the third month delivery fell RM14 per tonne to RM3,006, crude oil gained 42 cents per barrel to US$94.30 while gold rose US$2.80 an ounce to US$1,597.07.

At the regional markets, Japan’s Nikkei 225 edged up 0.54% to 8,341.20, Hong Kong’s Hang Seng Index rose 0.54% to 18,168.61, the Shanghai Composite Index was up 0.16% to 2,221.68, Taiwan’s Taiex added 0.43% to 6,661.99, South Korea’s Kospi rose 0.88% to 1,792.50 and Singapore’s Straits Times Index edged up 0.09% to 2,620.50.

On Bursa Malaysia, BAT was the top loser at mid-day and fell RM1.40 to RM48; PPB lost 40 sen to RM16.80, Tradewinds PLANTATION []s down 25 sen to RM4.30, Perak Corp 22 sen to RM1.12, HLFG and Petronas Gas down 18 sen each to RM11.52 and RM13.92, Inno 16 sen to RM1.34 and F&N fell 14 sen to RM17.96.

Gainers included Panasonic that rose 20 sen to RM20.02, Jaya Tiasa 11 sen to RM6.90, Dutch Lady, KAF, IGB and Tenaga up 10 sen each to RM23.40, RM1.43, RM2.43 and RM5.55 respectively, while Harvest Court was up nine sen to RM1.18.

Astral Supreme was the most actively traded counter with 66.2 million shares done. The stock edged up half a sen to 22.5 sen. Bursa Malaysia Securities Bhd later this morning had issued an unusual market activity query over the sharp increase in price and high volume of the company’s securities recently.

Other actives included Utopia, JCY, Gamuda and UEM Land warrants, and Wijaya warrants.



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Stocks to watch: IGB, Sunway, Kurnia Asia, Mitrajaya, Favelle Favco

KUALA LUMPUR (Dec 20): Stocks could see cautious trade on Tuesday, amid worries from the eurozone crisis and uncertainty in the Korean peninsula following the death of North Korean strongman Kim Jong-il.

The latest development was North Korea’s test firing of a short-range missile on its eastern coast on Monday, the day its leader Kim Jong-il's death was announced, South Korean media reported.

Reuters reported an unnamed South Korean official was quoted by Yonhap news agency as saying he did not believe the launch was linked to the announcement of Kim's death.

Meanwhile, China had voiced confidence in the new leader of its impoverished ally North Korea after his father died, promising to support Pyongyang as it enters into an uncertain transition, according to Reuters.

On the home front, stocks to watch include IGB CORPORATION BHD [], Sunway Bhd, KURNIA ASIA BHD [], MITRAJAYA HOLDINGS BHD [] and FAVELLE FAVCO BHD [].

IGB has made a RM277.50 million offer to acquire the remaining 50% stake in Great Union PROPERTIES [] Sdn Bhd (GUP), which owns the Renaissance Kuala Lumpur Hotel, from Stapleton Developments Ltd and Chong Kim Weng.

IGB, which currently owns 50% of GUP, would pay RM101.348 million and also settle the shareholder’s advance of RM176.15 million in GUP, for cash consideration of RM277.50 million.

Sunway Bhd has acquired the leases of two parcels of land for RM745.3 million with a gross development value (GDV) of RM12 billion in Medini Iskandar via a joint venture (JV) with Khazanah Nasional Bhd. The company said the two parcels of land adjacent to each other totaled 691 acres, adding that the leases acquired were for a period of 99 years.

Sunway said the newly acquired land known as Zone F Medini would boost its landbank by 30% from the previous 2,145 acres, while the proposed development will increase the company’s current GDV to RM 32 billion.

Kurnia Asia plans to sell its insurance unit, Kurnia Insurans (Malaysia) Bhd to AmG Insurance Bhd. It had submitted an application to Bank Negara Malaysia (BNM) for the Minister of Finance’s approval under the Insurance Act 1996.

Mitrajaya has secured a RM21.89 million project in the herbal and bioTECHNOLOGY [] products clusters in Pasir Raja, Terengganu. Its unit Pembinaan Mitrajaya Sdn Bhd was awarded the project by the East Coast Economic Region Development Council (ECERDC) to build the farm establishment, buildings and infrastructure works at the clusters.

Favelle Favco’s units have secured five separate purchase orders worth a combined RM72.3 million to supply four offshore cranes and one tower crane.

Favelle Favco Cranes (M) Sdn Bhd had received four contracts to supply offshore cranes each to SMOE Pte Ltd, Technics Offshore Engineering Pte Ltd, China Communications Import & Export Corporation and China Merchant Heavy Industry (Shenzhen) Co. Ltd respectively.

YTL CORPORATION BHD [] has extended a voluntary share exchange offer to the holders of YTL CEMENT BHD [] shares and its loan stocks to maximise the value of their investments.

The offer was RM4.50 for each YTL Cement share, or 3.17 shares of 10 sen each in YTL Corp for every one ordinary share of 50 sen each held in YTL Cement.

For the irredeemable convertible unsecured loan stocks (ICULS) holders, the offer was RM2.21 for every RM1 in ICULS held, or 1.56 YTL Corp shares for each ICULS.



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IGB to buy remaining 50% stake in Great Union Properties for RM277.5m

KUALA LUMPUR (Dec 19): IGB CORPORATION BHD [] has made a RM277.50 million offer to acquire the remaining 50% stake in Great Union PROPERTIES [] Sdn Bhd (GUP), which owns the Renaissance Kuala Lumpur Hotel, from Stapleton Developments Ltd and Chong Kim Weng.

IGB, which currently owns 50% of GUP, would pay RM101.348 million and also settle the shareholder’s advance of RM176.15 million in GUP, for cash consideration of RM277.50 million.

Based on GUP’s audited financial statements for the financial year ended (FYE) Dec 31, 2010, GUP recorded earnings before interest, depreciation and tax (EBITDA) of RM24.0 million while its net assets was RM116.6 million.

IGB said SDL was a subsidiary of New World Development Company Ltd, which was listed on the Hong Kong Stock Exchange. Chong is a senior partner of Jeyaratnam & Chong, a legal firm in Malaysia where IGB Group procures legal advisory services from time to time.

“The total consideration is based on 8.5 times the hotel’s 2010 EBITDA which is equivalent to valuation of the hotel at RM710 million net of bank borrowings and shareholders loan. The total consideration will be satisfied wholly in cash from internally generated funds,” it said.

IGB had invested RM226.0 million in GUP, comprising of subscription of 50 million RM1 shares between 1988 and 1992 and 100 million preference shares of 10 sen each (between 1993 and 1996) and shareholder’s advance of RM76.0 million.

“The total cost of investment in GUP post-proposed acquisition will be RM503.0 million,” it said. IGB said upon completion of the proposed acquisition, GUP would be a unit of IGB.

“As the controlling shareholder of GUP, IGB will have full management control and hence will be able to execute its business plans and strategies more effectively,” it said.



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Stocks to watch: IGB, Sunway, Kurnia Asia, Mitrajaya, Favelle Favco

KUALA LUMPUR (Dec 20): Stocks could see cautious trade on Tuesday, amid worries from the eurozone crisis and uncertainty in the Korean peninsula following the death of North Korean strongman Kim Jong-il.

The latest development was North Korea’s test firing of a short-range missile on its eastern coast on Monday, the day its leader Kim Jong-il's death was announced, South Korean media reported.

Reuters reported an unnamed South Korean official was quoted by Yonhap news agency as saying he did not believe the launch was linked to the announcement of Kim's death.

Meanwhile, China had voiced confidence in the new leader of its impoverished ally North Korea after his father died, promising to support Pyongyang as it enters into an uncertain transition, according to Reuters.

On the home front, stocks to watch include IGB CORPORATION BHD [], Sunway Bhd, KURNIA ASIA BHD [], MITRAJAYA HOLDINGS BHD [] and FAVELLE FAVCO BHD [].

IGB has made a RM277.50 million offer to acquire the remaining 50% stake in Great Union PROPERTIES [] Sdn Bhd (GUP), which owns the Renaissance Kuala Lumpur Hotel, from Stapleton Developments Ltd and Chong Kim Weng.

IGB, which currently owns 50% of GUP, would pay RM101.348 million and also settle the shareholder’s advance of RM176.15 million in GUP, for cash consideration of RM277.50 million.

Sunway Bhd has acquired the leases of two parcels of land for RM745.3 million with a gross development value (GDV) of RM12 billion in Medini Iskandar via a joint venture (JV) with Khazanah Nasional Bhd. The company said the two parcels of land adjacent to each other totaled 691 acres, adding that the leases acquired were for a period of 99 years.

Sunway said the newly acquired land known as Zone F Medini would boost its landbank by 30% from the previous 2,145 acres, while the proposed development will increase the company’s current GDV to RM 32 billion.

Kurnia Asia plans to sell its insurance unit, Kurnia Insurans (Malaysia) Bhd to AmG Insurance Bhd. It had submitted an application to Bank Negara Malaysia (BNM) for the Minister of Finance’s approval under the Insurance Act 1996.

Mitrajaya has secured a RM21.89 million project in the herbal and bioTECHNOLOGY [] products clusters in Pasir Raja, Terengganu. Its unit Pembinaan Mitrajaya Sdn Bhd was awarded the project by the East Coast Economic Region Development Council (ECERDC) to build the farm establishment, buildings and infrastructure works at the clusters.

Favelle Favco’s units have secured five separate purchase orders worth a combined RM72.3 million to supply four offshore cranes and one tower crane.

Favelle Favco Cranes (M) Sdn Bhd had received four contracts to supply offshore cranes each to SMOE Pte Ltd, Technics Offshore Engineering Pte Ltd, China Communications Import & Export Corporation and China Merchant Heavy Industry (Shenzhen) Co. Ltd respectively.

YTL CORPORATION BHD [] has extended a voluntary share exchange offer to the holders of YTL CEMENT BHD [] shares and its loan stocks to maximise the value of their investments.

The offer was RM4.50 for each YTL Cement share, or 3.17 shares of 10 sen each in YTL Corp for every one ordinary share of 50 sen each held in YTL Cement.

For the irredeemable convertible unsecured loan stocks (ICULS) holders, the offer was RM2.21 for every RM1 in ICULS held, or 1.56 YTL Corp shares for each ICULS.



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IGB to buy remaining 50% stake in Great Union Properties for RM277.5m

KUALA LUMPUR (Dec 19): IGB CORPORATION BHD [] has made a RM277.50 million offer to acquire the remaining 50% stake in Great Union PROPERTIES [] Sdn Bhd (GUP), which owns the Renaissance Kuala Lumpur Hotel, from Stapleton Developments Ltd and Chong Kim Weng.

IGB, which currently owns 50% of GUP, would pay RM101.348 million and also settle the shareholder’s advance of RM176.15 million in GUP, for cash consideration of RM277.50 million.

Based on GUP’s audited financial statements for the financial year ended (FYE) Dec 31, 2010, GUP recorded earnings before interest, depreciation and tax (EBITDA) of RM24.0 million while its net assets was RM116.6 million.

IGB said SDL was a subsidiary of New World Development Company Ltd, which was listed on the Hong Kong Stock Exchange. Chong is a senior partner of Jeyaratnam & Chong, a legal firm in Malaysia where IGB Group procures legal advisory services from time to time.

“The total consideration is based on 8.5 times the hotel’s 2010 EBITDA which is equivalent to valuation of the hotel at RM710 million net of bank borrowings and shareholders loan. The total consideration will be satisfied wholly in cash from internally generated funds,” it said.

IGB had invested RM226.0 million in GUP, comprising of subscription of 50 million RM1 shares between 1988 and 1992 and 100 million preference shares of 10 sen each (between 1993 and 1996) and shareholder’s advance of RM76.0 million.

“The total cost of investment in GUP post-proposed acquisition will be RM503.0 million,” it said. IGB said upon completion of the proposed acquisition, GUP would be a unit of IGB.

“As the controlling shareholder of GUP, IGB will have full management control and hence will be able to execute its business plans and strategies more effectively,” it said.



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Stocks to watch: IGB, Notion, Axiata, SYF

KUALA LUMPUR (Dec 10): Stocks on Bursa Malaysia could be given a boost on Monday following the firmer close on Wall Street as EU leaders worked out a plan to restore market confidence.

The Dow Jones industrial average ended up 186.56 points, or 1.55%, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69%, at 1,255.19. The Nasdaq Composite Index rose 50.47 points, or 1.94%, at 2,646.85.

For the week, the Dow rose 1.4%, the S&P gained 0.9% and the Nasdaq was up 0.8%.

As for Bursa Malaysia, the FBM KLCI fell 12.79 points or 0.87% to 1,460.13, weighed by losses including at KL Kepong, GENTING BHD, PPB, AMMB and Gamuda.

Hong Kong’s Hang Seng Index lost 2.73% to 18,586.23, South Korea’s Kospi fell 1.97% to 1,874.75, Japan’s Nikkei 225 was down 1.48% to 8,536.46, Taiwan’s Taiex lost 1.28% to 6,893.30, the Shanghai Composite Index shed 0.62% to 2,315.27 and Singapore’s Straits Times Index lost 1.24% to 2,694.60.

However, whether the rebound could last in the week ahead also remains to be seen.

Affin Investment Bank head of retail research Dr Nazri Khan is more cautious as he believes the FBM KLCI is likely to pullback lower to 1,430 to 1,420 support level on absence of an EU catalyst and lack of momentum from last week liquidity boost rally.

“We reckon the bearishness are driven by two important factors namely : (1) further caution from S&P 500 warning to massively downgrade EU countries and (2) investors losing expectation over EU summit to produce a financial bazooka to contain the debt crisis,” he said.

Stocks which could see trading interest on Monday include IGB Group Bhd, Axiata Group Bhd, NOTION VTEC BHD [] and SYF RESOURCES BHD [].

On Monday, Broadcast Australia will ink and agreement with Axiata Group Bhd’s unit Axiata Celcom wherein the former will be Celcom’s technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project.

Celcom would ultimately be providing infrastructure for the (DTTB) network and rent it out for stable income in the future.

Celcom, which invested RM1 billion in the 3G infrastructure this year and plans to spend another RM1 billion next year.

The Edge weekly reports that the IGB group is said to have engaged investment banks to look into structuring a real estate investment trust. The property group is hoping to launch the REIT by first half of 2012.

It also reported that Notion VTec Bhd is hoping to grow its hard disk drive segment by 40% next year with the growing momentum in its 2.5in HDD base plate business, which is expected to turn profitable in the second quarter.

Meanwhile, SYF is now on firmer footing after regularising its financial condition. It recorded net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year ago after the waiver of debts and overprovision of interest.

Its revenue was 6.3% higher at RM42.98 million compared with RM40.44 million a year ago. Its earnings per share were 43.37 sen compared with loss per share of 0.69 sen.



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