Reports » Malaysia
Malaysia stock market and companies daily report (August 22, 2012)
Westports Malaysia Mulls US$1b Malaysia IPO
Westports Malaysia, which is owned by entities linked to Hong Kong tycoon Li Ka-Shing, is planning to raise about US$1 billion through an initial public offer in Malaysia, according to persons familiar to the matter. The group which operates one of Asia’s busiest shipping terminals at Port Klang has invited banks to submit proposals to advise it on its IPO, which is expected to take place at the end of this year or early next year. Hutchison Port Holdings which is controlled by Li and operates 52 ports in 26 countries has a 31.5 percent shareholding in Westports Malaysia. The IPO will be the second equity-capital raising for groups linked to Li in Southeast Asia in many years. Hutchison Port Holdings Trust, which owns Deep-water port assets in Hong Kong and Shenzhen, raised US$5.5 billion in Singapore’s largest ever IPO in early 2011.
Significance: Malaysia’s buoyant market comes as IPOs elsewhere have either been delayed or scrapped owing to volatile market conditions. According to an analyst at Nomura Bank, investors are often baffled by the resilience of Malaysia’s economy, notwithstanding Malaysia’s exposure to Europe’s woes is decreasing. Exports to Europe, at 9.1 percent, are down from 11 percent in 2010.
Palm Oil Has First Weekly Gain In Six As Malaysian Exports Climb
Palm oil prices posted its first weekly gain in six, after exports from the world’s third largest producer, Malaysia rebounded as the lowest price in 10 months lured buyers. The November-delivery contract closed at RM2,962 a metric ton after gaining 0.7 percent on the Malaysia Derivatives Exchange, the highest settlement price for the most-active contract since 31 July. Futures on the other hand, advanced 2.8 percent this week after dropping to a 10-month low of RM2,820 on 14 August. For the first half of August, Malaysia’s exports climbed 7.6 percent to 606,449 tons when compared to July in the same period. Exports fell 15.3 percent to 1.3 million tons in July from a month earlier according to the Malaysian Palm Oil Board on 10 August. Palm oil for January delivery rose 1 percent to close at Rmb7,814 a ton on the Dalian Commodity Exchange.
Significance: Malaysia’s palm oil exports began a tentative recovery for the first half of August attributed by higher shipments to China and India. However, there is a slim chance that production growth may be higher than export growth. In the futures market, most investors reversed their positions ahead of a long weekend, with Malaysian markets closed on Monday and Tuesday for the religious holiday.
Affin Holdings Advances On News Of Bank Muamalat Stake Purchase
Affin Holdings (Affin), rallied the most in a month after Bank Negara approved Malaysia’s smallest banking group to begin talks on buying a stake in the country’s second-oldest Islamic bank. The stock advanced as much as 2.3 percent to RM3.56 in Kuala Lumpur, before closing at RM3.55, its sharpest climb since 18 July. Acquiring a stake in Bank Muamalat Malaysia may increase Affin’s scale and help strengthen its position in the Southeast Asian nation’s Islamic banking industry, according to Alliance Financial Group. Bank Muamalat is the second full-fledged Islamic bank set up in the country after Bank Islam Malaysia, and is 70 percent owned by DBR-Hicom (DRB) with the remaining stake held by state investment company, Khazanah Nasional. The stock was maintained at a strong buy call with a target price of RM4.42, according to Alliance Research.
Significance: The deal could offer an attractive value proposition to Affin Holdings, however pricing issues will determine whether this potential acquisition is earnings and value accretive to shareholders. Furthermore, DRB needs to pare down its stake to 40 percent in the Islamic bank to comply with Malaysia’s banking rules on maximum shareholding limits.
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