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Reports Malaysia

Malaysia stock market and companies daily report (April 08, 2014)

April 8, 2014, Tuesday, 04:52 GMT | 23:52 EST | 09:22 IST | 11:52 SGT
Contributed by Shares Investment

Boustead Plantations’ IPO To Raise RM928m

- The initial public offering (IPO) of Boustead Plantations is expected to raise around RM928 million based on the indicative offer price of RM1.60 a share and is slated for a mid-June listing.

- Boustead Plantations will be selling up to 41 percent of its shares, of which 10 percent is for institutional investors and 31 percent for retail subscription.

- About RM420 million or 45 percent of the IPO proceeds will be set aside to buy earnings-accretive and mature plantation estates in Malaysia and would consider overseas expansion in the long term.

Significance: The offering of Boustead Plantations is very timely as the crude palm oil price is on the uptrend especially during the Ramadan month of June. Furthermore, the company invests heavily in high density planting and usage of semi-clonal materials, which could raise yields by at least 10 percent.

Sime Darby Sells Power Business For RM300m

- Sime Darby has disposed of its local power business under Port Dickson Power for RM300 million to Malakoff Corporation.

- Malakoff would take over the remaining 75 percent in Port Dickson Power it does not already own and 100 percent of its operation and maintenance arm, Sime Darby Biofuels.

- The price takes into account the projected cash flows of both companies and is expected to close by second quarter of this year.

Significance: The deal will enable Sime Darby to book a one-off net gain of RM56.3 million and is also in line with the company’s strategy to focus on its five core businesses.

Tune Ins Revisits Indonesian M&A Plans

- Tune Ins Holdings is negotiating with new potential partners to revive merger and acquisition (M&A) plans in Indonesia as regulatory conditions for foreign insurers are now more investor-friendly. Previously, it planned to acquire a 70-percent stake in PT Batavia Mitratama Insurance in 2013 but it fell through.

- Tune Ins is looking to acquire an insurance licence to operate in countries that are key markets for its lucrative travel insurance business and in talks with new potential partners. Other than Indonesia, it is also foraying in Thailand with an investment in Osotspa Insurance Public Company.

- Tune Ins is also looking at more tie-ups with airlines and travel providers, as well as to expand its marketing and product range to penetrate new markets.

Significance: RHB Research has maintained “Buy” with target price of RM2.40 on high earnings growth expectations and regional market expansion backed by its unique business model and partnerships for its travel insurance, combining best of both worlds of insurers and consumer stocks.

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