Reports » Malaysia

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

Contributed by Shares Investment

World Bank Recognises Malaysia As A Regional Leader In Corporate Governance
Malaysia has received strong ratings from the World Bank in its Corporate Governance Report on Observance of Standards and Codes 2012 (ROSC) released yesterday. Based on the report, Malaysia is also recognised as a regional leader in corporate governance, and has made substantial progress in improving the legal and regulatory framework in relation to corporate governance. According to the report, Malaysia’s overall scores are higher than the average scores of countries within the Asian region. The report also acknowledges that Malaysia has a large capital market, strong institutions, sophisticated participants and high quality accounting practices. “It is important to have in place a strong corporate governance eco-system in order to sustain active investor interest and growth in the capital market. We are highly encouraged by the strong endorsement by the World Bank on the collective efforts by the regulators and the industry in strengthening corporate governance in Malaysia,” said SC Chairman, Datuk Ranjit Ajit Singh.
Significance: The CG ROSC, which is an independent assessment carried out by the World Bank, examines the country’s corporate governance framework benchmarked against the OECD Principles for Corporate Governance. This is the third time that Malaysia has participated in the assessment; the first was in 2001, and subsequently in 2006.

Quek Fails To Take HLCap Private
Tan Sri Quek Leng Chan has failed in his attempt to privatise Hong Leong Capital (HLCap) after receiving a poor response to his takeover offer of RM1.71 per share. In an announcement to Bursa Malaysia on Monday, the said unconditional takeover offer made by Hong Leong Financial Group (HLFG) had only garnered an acceptance level of 2.21 percent from minority shareholders. Prior to the bid, HLFG owned 79.09 percent of HLCap. The financial group currently holds an 81.33 percent stake in HLCap, which wholly owns Hong Leong Investment Bank and Hong Leong Asset Management. In order to trigger a compulsory takeover, HLFG would have to gain acceptance of 90 percent of the shares it does not own. HLCap’s share price soared to a near 13-year high of RM2.31 on Monday. The surge in share price indicated that the investing fraternity viewed the general offer of RM1.71 as too low. The increase in buying interest also suggested that some minority shareholders were accumulating shares on the open market with the intention of blocking the privatisation deal.
Significance: The HLFG offer is at nearly a 34% premium to the stock’s one-month volume weighted average price (VWAP) of RM1.28 and a 41.32 percent premium to its six-month VWAP.

Ingress Wins Proton Parts Contract
Ingress Corporation has received a contract for the development and supply of body panels for a new model of Proton, comprising front and rear side structures and roof module. The share price and volume of Ingress had surged and hit its eight-year high of RM1.52 since 22 February, on market expectations that it would secure more contracts. The counter was down five sen and closed at RM1.47 yesterday. It hovered between RM1.44 and RM1.52 with 2.73 million shares traded. In a filing to Bursa Malaysia, the automotive components assembler said its 70 percent owned unit, Ingress Technologies (ITSB) had on 22 February received a letter of appointment (LOA) from PHN Industry (PHN) to act as a Tier-2 supplier to PHN for the project. The total revenue generated is estimated at RM107.5 million. The contract is expected to commence in the second quarter of financial year ending 31 January 2015 with project duration of five years, said the company.
Significance: According to Ingress, the total cost of investment is estimated at RM23.1 million, which includes the tools, jigs and die, assembly equipment and others. The company believes the project would contribute positively to its future earnings.