Reports » Malaysia

Malaysia stock market and companies daily report (March 13, 2013)

Contributed by Shares Investment

MISC Falls Below PETRONAS Takeover Price
Shares of MISC fell to RM4.98 in active trade yesterday, the lowest since early February after Petroliam Nasional (PETRONAS) announced its takeover at RM5.30 a share. The stock closed 2.13 percent lower at RM5.06 with 16.2 million shares done. To recap, MISC shares rallied on 4 February after it resumed trading following the takeover offer by PETRONAS on 31 January. PETRONAS, which owns a 62.67 percent stake or 2.797 billion shares of MISC, had offered a take-over price of RM5.30 per share, 18.04 percent (81 sen) above the closing price of RM4.49 on 31 January. News from Employees Provident Fund (EPF) board further boosted the share price when chief executive officer Tan Sri Azlan Zainol stated that PETRONAS should raise its RM8.8 billion buyout offer for MISC. The EPF owns 9.6 percent of the world’s second-largest liquefied natural gas shipping company.
Significance: According to Aminvestment Bank which is the independent adviser to the minority shareholders of MISC, deemed the PETRONAS’ offer as “Not Fair” but “Reasonable”.

Sunway Gets RM453mil Bus Rapid Transit Project
Sunway’s indirect wholly owned subsidiary, Sunway Construction accepted a letter of award worth approximately RM452.5 million from Syarikat Prasarana Negara for the proposed design, construction, completion and commissioning of the proposed bus rapid transit (BRT) – Sunway Line. The proposed BRT is expected to be completed within 24 months from the date of award, as indicated in its filing with Bursa Malaysia on Monday. The proposed BRT, which stretches approximately 5.4 km, will link key commercial areas in Bandar Sunway and Subang Jaya with as many as seven stations. Besides this, it strategically connects to other modes of public transportation, such as the light rail transit (LRT) and KTM Komuter. Furthermore, as part of Sunway’s continuous corporate social responsibility initiatives, Sunway will additionally and separately contribute projects amounting to approximately RM99 million, to the proposed BRT.
Significance: Due to open in early 2015, the line would help elevate traffic congestion in Bandar Sunway, especially the traffic heading from Sunway Pyramid to the Federal Highway. The BRT is also Bandar Sunway’s missing link between the KTM line and the LRT extension.

Keck Seng Up On Good Dividend And Re-Valuing Of Its Land Bank
Keck Seng (M) was up in anticipation of a bumper dividend from the company. This comes ahead of the expiry of its tax credit balance at the end of this year. Granted by the government under Malaysian tax regulations section 108, it allows companies with unused balances to continue paying franked dividends for a six-year transitional period starting 1 January 2008 and expires on 31 December 2013. The other reason for the rise in the share price is due to the firm’s undervalued land bank in Johor. According to HwangDBS Vickers Research analyst Quah He Wei, the firm’s 740 hectares of prime tracts surrounding Johor Bahru were not re-valued for the past 32 years. These tracts have book values of between 50 sen and RM4.50 per square foot (psf). The share price closed at RM5.30 up 31 sen or over 7 percent.
Significance: Quah noted that the company may pay a dividend of RM359 million or 96 sen a share. The analyst also estimated that every RM5 psf land price increase will raise HwangDBS’s fair value for Keck Seng by 12 percent.