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Reports Malaysia

Malaysia stock market and companies daily report (June 17, 2014)

June 17, 2014, Tuesday, 06:17 GMT | 01:17 EST | 09:47 IST | 12:17 SGT
Contributed by Shares Investment

FGV Expects Further Plunge In CPO Production

- Felda Global Ventures expects to see further production shortfalls in the next few months due to adverse weather conditions.

- The planter’s crude palm oil (CPO) output in the first quarter of the year had dropped seven percent and could fall further if the El Nino phenomenon occurs.

- El Nino, which last occurred in 2009, is expected to hit the region again this year.

Significance: Though El Nino could hurt production volume, however, CPO prices could also be boosted as a result of the limited supply, where prices are projected to increase to between RM2,600 and RM2,700 per tonne from the current RM2,400 per tonne.

Sarawak Cable To Acquire Two Other Cable Players

- Sarawak Cable has proposed to acquire Universal Cable (M’sia) and Leader Cable Industry for an aggregate purchase consideration of RM210 million.

- The two target companies command the lion share in the cabling industry, whose primary business activities are centered around the manufacture and sale of cables for the telecommunications and power industries in both the domestic and export markets.

- The acquisition will enable Sarawak Cable to expand its foothold in Peninsular Malaysia and capture new export markets.

Significance: On top of the new business opportunities created for the enlarged group, the power cable and conductor segment could generate a very consistent revenue stream for Sarawak Cable supported by its wide customer base in Sarawak and Sabah.

Ideal Jacobs Makes Foray Into O&G

- Ideal Jacobs (Malaysia) Corporation has agreed to acquire two oil and gas (O&G) companies, Cekap Technical Services and MECIP Global Engineers via a reverse takeover (RTO) at a purchase consideration which is yet to be determined.

- Cekap is in the business of integrated multi-disciplined project management, project services and integrated operations in the O&G industry, while MECIP is in multi-disciplined engineering consultancy services for the O&G industry who is licensed by Petronas for the provision of consultancy services, engineering design services and manpower supply.

- The acquisition will be financed through the issuance of new shares in Ideal Jacobs at an issue price of 25 sen per share. This represented a discount of 9.8 percent to the one month volume weighted average market price of Ideal Jacobs up to 12 June 2014.

Significance: The proposed RTO aims to provide existing shareholders of Ideal Jacobs with an opportunity to benefit and ride on Cekap’s and MECIP’s growth potential in the O&G industry.