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Reports Malaysia

Malaysia stock market and companies daily report (December 24, 2013)

December 24, 2013, Tuesday, 03:14 GMT | 22:14 EST | 07:44 IST | 10:14 SGT
Contributed by Shares Investment

Maybank Investment Positive On Malaysia’s Macroeconomic Outlook

- Maybank Investment is positive on Malaysia’s macroeconomic picture next year, given the steady growth momentum of its gross domestic product recorded in 2013 as well as the clarity and credibility of the government’s fiscal policy to address the budget deficit.

- Maybank highlighted that domestic customer spending is the key thing to watch as inflation accelerates and inflationary expectations rise in reaction to subsidy and price adjustments.

- On the Malaysian equities, Maybank expects the market to continue to be defensive in 2014 but at a milder level with the United States quantitative easing taper being priced in.

Significance: Maybank is of the view that Malaysia’s strong macroeconomic policies and banking and corporate balance sheet will contribute to the sustainability of Malaysia’s longer term growth, adding that 2014 would be a stock-picking year and investors should focus on value stocks in the near term.

Gamuda Pens Revised Offer For Kesas

- Gamuda has increased its purchase consideration for Perbadanan Kemajuan Negeri Selangor and Permodalan Nasional’s stake in Kesas Holdings to RM420 million (from RM375 million) and RM280 million (from RM250 million), respectively. This is after its initial offer for the toll concessionaire was rejected by the duo.

- Gamuda will also increase the purchase consideration for Amcorp Properties’ 20 percent stake in Kesas by 12 percent to RM280 million from RM250 million despite the developer having already accepted the offer earlier this month.

- The offers will remain open for acceptance until 5pm on 30 December 2013, after which it will lapse unless Gamuda agrees in writing to extend it.

Significance: RHB Research had earlier said the original deal could boost Gamuda’s FY15 earnings by RM51 million or 8 percent, taking into account an incremental RM84 million net profit from the additional 70 percent stake, minus funding cost of RM33 million. On the other hand, the acquisition increased Gamuda’s debt and net gearing ratio, effectively depleting its war chest.

MAH Buys Stakes In 2 Turkish Firms For RM1b

- Malaysia Airport Holdings (MAH) announced it will exercise its right of first refusal to acquire a 40 percent stake each in two Turkish companies, Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim ve Isletme A.S (ISG) for RM705.7 million and LGM Havalimani Isletmeleri Ticaret ve Turizm A.s (LCM) for RM302.5 million.

- ISG’s core business is managing the operations of Sabiha Airport while LGM’s operations including establishing and operating hotels as well as leasing out food and beverage facilities and trading at the airport.

- The acquisition will be financed via proceeds from a proposed private placement and internally generated funds.

Significance: The acquisitions are part of MAH’s plan to enhance and diversify its assets and earnings base to improve long-term growth prospects. Upon completion, MAH will have majority stakes in ISG and LCM, which will help it further strengthen its foothold and influence as an airport operator in Turkey.