Reports » Malaysia

Malaysia stock market and companies daily report (February 06, 2013)

Contributed by Shares Investment

Alam Maritim Shares Mixed Despite Job Extension
Alam Maritim shares closed slightly mixed yesterday despite an extension contract worth RM70.8 million awarded to its wholly owned unit, Alam Maritim (M) from Petronas Carigali. Alam Maritim shares fell one sen, hovered between 83.5 sen and 80.5 sen throughout the day with 3.9 million shares traded yesterday. Last Monday, Alam Martim was awarded a contract for the provision of two workboats to support Petronas’ painting activities under the national oil firm’s upstream operations in Peninsular Malaysia. Maybank Investment Bank highlighted that the successful extension of workboat contracts is worth an estimated daily charter rate (DCR) of RM98,000, which is three percent higher than a recent contract announced in the last October. “This is also 15 percent higher than the original contract in May 2012 and 31 percent higher than for a similar work boat contract secured in Sept 2011,” it added. Alam Maritim believes its subsea division may see opportunities to win some contracts as there is RM1.9 billion worth of jobs being tendered out that are based on spot rates.
Significance: OSK Research expects more contracts to be awarded to the company’s offshore support vessel (OSV) division in the near term, but maintain its cautious view on the company’s offshore, installation and construction (OIC) and subsea businesses as both divisions have yet to secure any contracts thus far.

IJM’s RM310m Disposal Of Stake In Kuantan Port
IJM Corporation’s wholly owned unit Road Builder (M) Holdings entered into a memorandum of understanding (MOU) with China port operator Guangxi Beibu Gulf International Port Group for the disposal of 48 million shares or 40 percent stake in Kuantan Port Consortium (KPC) for an estimated RM310 million. IJM expects the strategic partnership with Guangxi to bring about the best practices of the port management. In addition, Guangxi’s wide network of clienteles will enhance the capacity utilisation of Kuantan Port, in particular when the port capacity is increased with the development of a new deep-water terminal (NDWT). However, the deal would hinge on the government’s grant of 60 years concession to KPC for the existing Kuantan Port as well as the NDWT for the said period. The proposal will be formalised when both parties enter into a definitive agreement, which is expected to be executed within six months from the date of the MOU, said IJM.
Significance: Under the deal, Guangxi will play an active role in attracting foreign direct investments especially from China, to invest in the East Coast Corridor, which will contribute positively to the volume of cargoes handled by Kuantan Port.

UMW Clinches RM432m Shell Job
UMW Holdings’ wholly-owned unit UMW Petrodril (M) had received a US$140 million (RM432 million) contract from Sabah Shell Petroleum. Based on a statement to Bursa Malaysia, the company is to supply a top tension riser for the latter’s offshore oil and gas (O&G) operations within Sabah’s Malikai deep-water field. A top tension riser functions as a channel to transport materials from the seabed to production and drilling facilities above the water surface. “The contract is expected to contribute positively to the 2013 earnings and net assets of the UMW Group,” UMW said. The Malikai field is Malaysia’s third deep-water (O&G) project and the development will require 17 wells drilled from a 23,500 tonne tension leg platform (TLP) production facility. Currently, all contracts for the engineering, procurement and construction of the TLP have been awarded.
Significance: The project involves first TLP to be fabricated and installed in Malaysia. According to RAM Ratings Services, UMW Holdings is estimated to spend RM2.6 billion to expand its oil and gas services over the next three years.