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Reports Malaysia

Malaysia stock market and companies daily report (February 21, 2014)

February 21, 2014, Friday, 05:36 GMT | 00:36 EST | 10:06 IST | 12:36 SGT
Contributed by Shares Investment

Aeon Ups Capex By RM200m To RM700m For 2014

- Aeon Co (M) increased its yearly capital expenditure to RM700 million from RM500 million to accommodate its expansion plan this year.

- Aeon is planning to open three more outlets this year in Bukit Mertajam (Penang), Taiping (Perak), Quill City Mall (Kuala Lumpur) as well as two MaxValu outlets in Klang Valley. The outlets are expected to be completed by year-end.

- An Aeon store would cost the company around RM50 million to RM300 million depending on the size while a MaxValu store will cost around RM5 million on average.

Significance: Currently, there are 27 Aeon outlets and four MaxValu stores and the additional outlets are expected to yield more revenue and earnings for the retailer.

Gamuda Likely To Win MRT2 Contract

- According to CIMB Research, Gamuda is poised to win the Mass Rapid Transit Two (MRT2) contract. The group is the main contractor for MRT1 and its track record will likely help the company secure this second contract.

- CIMB notes that for MRT2, initial stages such as project structure, alignment display and prequalification rounds would begin this year while awards are likely to be at end-2015 or early 2016.

- Mass Rapid Transit Corporation reiterated that with the execution and rollout of MRT Sungai Buloh-Kajang at the tail-end, it is prepared to execute MRT2, pending the government’s official green light.

Significance: Gamuda has over 300km of tunneling experience locally and overseas, exceeding the track record of other local contractors, making them likely to emerge as the winner of the MRT2 project, as it did with MRT1.

Maybank Kim Eng: “Buy” On SapuraKencana

- Datuk Mokhzani Mahathir made a surprise move to pare down his shareholding in SapuraKencana Petroleum via his private vehicle Khasera Baru, selling 190.3 million shares of the company at RM4.30 apiece in off-market trades, making RM820 million cash.

- After the disposal, Khasera Baru’s shareholding was reduced to 10.1 percent or 605 million shares while Mokhzani has a direct stake of 9.5 million shares or 0.16 percent.

- The surprise move could be due to Mokhzani focusing more on Yinson, which the tycoon has transformed into an oil and gas powerhouse over a short period.

Significance: Nonetheless, Maybank Kim Eng keeps its “Buy” call on SapuraKencana, citing that the disposal does not change its investment thesis for the company. The recently completed Newfield acquisition is expected to drive medium-term earnings growth while its drilling and fabrication operations are the organic growth drivers.