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Reports » Malaysia

Malaysia stock market and companies daily report (February 15, 2013)

February 15, 2013, Friday, 04:05 GMT | 23:05 EST | 08:35 IST | 11:05 SGT
Contributed by Shares Investment

Ahmad Zaki Secures Approval For RM1.55b EKVE Highway
Ahmad Zaki Resources (AZRB) had received approval to proceed with the construction of the East Klang Valley Expressway (EKVE). The RM1.55 billion highway connecting the Silk Highway in Kajang to the Karak Expressway in Gombak will be built with a government loan of RM635 million. In an announcement on Wednesday, AZRB said it had entered into a concession agreement with the government for the design, construction, completion, operation, management and maintenance of the EKVE for a period of 50 years. “The government agreed to provide the company with a loan for a maximum principal amount of RM635 million at an interest rate of four percent per annum, capitalised annually, subject to a separate agreement to be entered into between the government and the company,” it said. According to RHB Research in a note last week, it expected AZRB to secure contracts with a cumulative value of RM500 million this year, only a third of the EKVE’s contract value.
Significance: The EKVE contract which is worth RM1.55 billion is more than the value of AZRB’s order book for the whole of last year (RM1.44 billion). The award is expected to significantly boost the company’s construction business order book that currently stands at about RM2.3 billion.

Tebrau Teguh & UEM Land Stocks Rises On Iskandar Malaysia Theme
Shares of Tebrau Teguh and UEM Land rose in active trade on Thursday as interest builds up upon the Iskandar Malaysia theme. At 11.03am, Tebrau rose 4.5 sen to 92.5 sen with 4.37 million shares done. UEM Land climbed nine sen to RM2.20 with 3.73 million units done. Tebrau Teguh came into the spotlight following the proposed listing of its major shareholder Iskandar Waterfront Holdings. The listing which is slated for June is expected to raise more than US$300 million (RM912 million). The proposed market capitalisation was RM9 billion. As for UEM Land, its plan to sell some of its Johor land to prominent corporate players was viewed as positive by analysts as it would diversify its development risks and draw in reputable names into the development of Puteri Harbour. UEM Land had in January inked two sale and purchase agreements with Liberty Bridge (LBSB) to dispose of two parcels of land in Commercial North Puteri Harbour Nusajaya measuring about 29 acres and 14.7 acres for RM211.1 million and RM189.6 million, respectively.
Significance: Both UEM Land & Iskandar Waterfront Holdings are expected to benefit greatly from the latent demand for properties in Iskandar Malaysia which could come from house buyers seeking employment in Nusajaya and Singapore nationals who opt to live across the causeway due to lower living cost in Malaysia.

Kumpulan Hartanah Selangor Shares Surge On Takeover Offer
Shares of Kumpulan Hartanah Selangor (KHSB) hit limit-up on Thursday following Kumpulan Darul Ehsan (KDEB)’s offer to takeover 56.57 percent stake in KHSB for RM193.46 million or 76 sen a share. The counter closed yesterday at 68.5 sen, rose 30.5 sen or 80.26 percent with 8.31 million shares changing hands. According to a filling to Bursa Malaysia, KDEB is looking to buy out Kumpulan Perangsang Selangor’s (KPSB) stake in KHSB, whereas KPSB is required to reply within 10 days if it is agreeable to the offer. The acquisition is due to be completed within three months of the sale purchase agreement being drawn up. The offer price of 76 sen is 10.14 percent above the net asset per share of 69 sen as at 31 December, 2011. KHSD noted that the audited consolidated net assets of KHSB as at 31 December, 2011 was RM308.63 million.
Significance: KDEB intends to delist KHSB on the main market upon completion of the takeover. It is noted that the company does not intend to take any steps to address any shortfall in the public shareholding spread of the company in the event that it receive acceptances under the offer resulting a combine share ownership of more than 75 percent in the company.