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Reports Malaysia

Malaysia stock market and companies daily report (December 27, 2013)

December 27, 2013, Friday, 04:16 GMT | 23:16 EST | 08:46 IST | 11:16 SGT
Contributed by Shares Investment


IOI Properties: En Route To Be First Listing Of 2014

- IOI Properties Group is slated for a Mainboard listing on 15 January 2014 via distribution-in-specie from IOI Corporation of one IOI Properties share for every three IOI Corporation shares. It is set for an RM8.1 billion market capitalisation at the reference price of RM2.51 per share.

- The company is not expected to receive any proceeds as no new shares would be issued while the 1-for-6 restricted offer for sale would raise about RM1.9 billion.

- IOI Properties is expected to record a turnover of not less than RM2.5 billion annually for the next three years due to its line-up of projects in various locations like Iskandar Malaysia, Klang Valley, Singapore and Xiamen.

Significance: IOI Properties’ listing will enable it to demerge itself from IOI Corporation that will provide a platform for the respective entities to pursue different growth and business strategies. It will also give greater visibility on the separate performance of the companies’ businesses and allow it to gain more recognition.


Axis REIT To Dispose Axis Plaza For RM34m

- Axis Real Estate Investment Trust (Axis REIT) proposed to sell Axis Plaza for RM34 million to Collective Developers. Given the favourable market prices for asset sales, the trust feels that it is an opportune time to re-deploy its capital for more yield-accretive properties as there is limited upside for future rental growth for the property.

- The freehold five-storey office/warehouse with a two-storey basement car park was one of its initial public offering properties purchased eight years ago at RM22 million. Currently, Axis Plaza has a market value of RM32 million as appraised by C H Williams Talhar & Wong.

- Axis REIT is expected to gain approximately RM11 million from the sale of Axis Plaza and the disposal will contribute positively to its earnings for the full year ending 31 December 2014. A portion of the sale price will be used to reduce gearing to produce Axis REIT with headroom for future acquisition.

Significance: Axis REIT intends to fully distribute the approximate RM11 million net gain from the sale, which will translate into an additional income distribution of RM0.0235 per unit to unitholders in the second quarter of 2014.


Encorp Secures RM101.7m Building Contract

- Encorp’s wholly-owned subsidiary Encorp Construct was awarded a letter of acceptance for the construction and completion of main contract works for a proposed mixed development project in Kuala Lumpur.

- According to the news release on Bursa, the letter of acceptance was issued by Aikbee Timbers. The development will comprise one block of 25 floors, with 403 apartment units, basement and multi-level carparks and a commercial area on the lower floor. The proposed development will also be connected to the existing Pearl Point Shopping Mall via a bridge on the first floor.

- The contract tenure is for 22 months, starting 2 January 2014 to 1 November 2015, and is valued at RM101.7 million.

Significance: The award of the main contract is expected to contribute positively to the earnings and net assets of Encorp for FY14 and FY15.