Malaysia stock market and companies daily report (January 23, 2014)
January 23, 2014, Thursday, 07:10 GMT | 02:10 EST | 12:40 IST | 15:10 SGT
Affin Seals Deal With Hwang-DBS To Takeover Its Core Business
- Affin Holdings is set to see a synergistic boost in its brokerage business following its most recent purchase of Hwang-DBS. The all-cash deal is set to be priced at some RM1.36 billion.
- The combined fund houses of Hwang-DBS and Affin will see its assets under management pool jump in terms of ranking, to the top five in Malaysia, where the combined entity will oversee RM27.9 billion worth of funds.
- It was announced in a Bursa filing that Hwang-DBS plans to distribute most of the bulk of the sale, which will see a gain of some RM637.9 million, to its shareholders. This could possibly translate to a dividend per share of RM2.50 for shareholders of Hwang-DBS.
Significance: The acquisition will enable Affin to tap into Hwang-DBS’ scale, expertise, distribution and customer reach. This will also allow Affin to make the leap from providing small-scale advisory services to underwriting and backing deals and also allow it to take on larger and more complex share and debt issuances.
KLCC Property’s FY13 Earnings In Line Of Expectations
- KLCC Property Holdings reported its group earnings, which were largely within expectations. Core pre-tax profit for FY13 was RM875.2 million.
- Other than its Mandarin Oriental hotel business, which was largely affected by lower food and beverages and occupancy rates, overall year-on-year growth was fuelled by most divisions. A distribution per unit of 8.2 sen for 4Q13 was declared by the trust. This brings the year to date net distribution per unit to 27.7 sen.
- KLCC Property projects a decent FY14 pre-tax profit growth of 7 percent year-on-year, which will be mainly supported by its existing assets.
Significance: Despite the implementation of the goods and services tax and a potential hike in the overnight policy rate in 2015, KLCC Property is set to withstand such headwinds as its leases are based on a triple net lease, which requires its tenants to meet all outgoings, including property assessment and electricity charges, therefore minimising the impact to its eventual bottom line.
Maybank Research Maintains Buy Call On Barakah
- Following the official announcement of Barakah Offshore Petroleum (Barakah) on the back of its installation contract for transportation in Saudi Arabia in February, coupled with its existing orders backlog, Maybank IB research has maintained its “Buy” call on Barakah.
- The contract is a partnership between Barakah and a local operator in Saudi Arabia, where Barakah will have an 85 percent stake in, which will see a yield of RM50 million and RM70 million per year, with a total value of up to RM2.5 billion.
- Barakah is confident of consistently replenishing orders worth between RM600 million and RM700 million, and Maybank IB has maintained its target price of RM1.85 on Barakah.
Significance: Barakah’s backlogged orders stands at RM2.3 billion, and this is largely able to provide Barakah with three-year earnings visibility. Maybank IB expressed that Barakah’s tender pipeline is healthy, with a combined value of RM3 billion comprising 77 projects.