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Reports Malaysia

Malaysia stock market and companies daily report (April 02, 2014)

April 2, 2014, Wednesday, 05:33 GMT | 00:33 EST | 09:03 IST | 11:33 SGT
Contributed by Shares Investment

Maybank To Grow Investment Banking Arm’s Earnings Contribution To 10%

- Maybank Kim Eng, the investment banking arm of Malayan Banking Group (Maybank), is aiming for higher pre-tax profit contribution of at least 10 percent to the banking group’s total earnings. Maybank Kim Eng chief executive officer John Chong added that no specific timeframe has been set to achieve this figure.

- Maybank Kim Eng, which currently operates in six markets in the region namely Malaysia, Singapore, Indonesia, Vietnam, the Philippines and Thailand, has no immediate plans to move into other markets.

- Maybank president and chief executive officer Datuk Abdul Farid Alias said under the investment banking business, the group had a comfortable deal pipeline for the first half of 2014 but declined to elaborate.

Significance: Malaysia’s high debt level, which stood at about 83 percent of gross domestic product, higher than many other countries in Asia like the Philippines, Indonesia, Singapore, Hong Kong and Japan, has not been a worry for Maybank.

SapuraKencana Wins US$454m Worth Of Contracts

- SapuraKencana Petroleum has won a new contract in Congo as well as three contract extensions in Angola, Brunei and Thailand worth a total of US$454 million (RM1.5 billion).

- Notably, the new contract in Congo is worth US$108 million, where the company will charter to Total E&P Congo a semi-tender assist drilling rig for a year, with an option to extend for another year.

- The extension of contracts in Thailand and Brunei are worth US$90 million and US$92 million with Chevron Thailand Exploration and Production and Brunei Shell Petroleum Company respectively.

Significance: The contracts will increase SapuraKencana’s drilling division’s order book to RM26.9 billion from RM25.4 billion. Furthermore, the new contract win in Congo will help strengthen the group’s geographical diversity and solidifies its West African presence.

JTI In RM808.5m Buyout By Parent Company

- JT International (JTI) rose to a record high of RM7.64 yesterday on the takeover offer by its parent company, JT International Holding BV, which holds a 60.4 percent stake in the group. JTI’s major shareholder, Japan Tobacco Incoporated, launched a conditional takeover in JTI at RM7.80 cash per share, totaling RM808.5 million.

- For the financial year ended 31 December 2013, JTI posted a 20 percent increase in net profit to RM121.6 million on the back of a 3.2 percent rise in revenue to RM1.3 billion.

- The prevailing structural headwinds in the matured cigarette industry would be a limitation if JTI remains listed, hence research houses have recommended investors to accept the offer.

Significance: Investors would be able to lock-in a 20 percent capital gain from the RM7.80 offer based on the closing price of RM6.50 last Friday. Furthermore, the share had not traded near or above the offer price in the last 15 years, representing a good opportunity to lock in their gains.