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Reports Malaysia

Malaysia stock market and companies daily report (March 20, 2014)

March 20, 2014, Thursday, 06:29 GMT | 02:29 EST | 10:59 IST | 13:29 SGT
Contributed by Shares Investment

MIDA Seeks RM8b Investment In Integrated Supply Chain Management

- The Malaysian Investment Development Authority (MIDA), is seeking to achieve a target of RM8 billion investments for its integrated supply chain management division this year from domestic and foreign companies.

- MIDA’s executive director of services, Datuk Mathialakan Chelliah says, “We are looking at multinational corporations based in Indonesia, Singapore and the US to either relocate their operations or set up regional offices in the country.”

- MIDA is hoping to attract 193 domestic and foreign players involved in supply chain management activities to invest in Malaysia to achieve the proposed RM8 billion target. It believes that Malaysia has the right ecosystem to become the regional supply chain hub.

Significance: MIDA is looking to work closely with the Iskandar Regional Development Authority to promote the logistics and services sector in Iskandar Malaysia by tapping on its strategic location and close proximity to Singapore.

Eco World To Launch RM8b Development

- Eco World Development Group will be launching EcoSanctuary, a new project in south Klang worth RM8 billion.

- The project is part of Tropicana Corporation’s 468.8 hectares (ha) Tropicana Aman development, previously known as Canal City. Eco World is acquiring 123.5ha from Tropicana for RM470.7 million.

- The land deal is expected to conclude in the second half of this year. Following which, Eco World would be able to launch the project that will span over eight years and feature eco-themed mixed residential and commercial properties.

Significance: Tropicana is expected to gain RM170 million from the land sale and will unlock the value of a sizeable landbank and monetise assets while Eco World will be able to replenish its landbank in major growth corridors to expand its operations, which is in line with its strategy.

Maybank IB Research Maintains “Buy” Call On Top Glove, Target Price RM6.20

- Maybank IB Research is of a view that Top Glove’s 2Q14 results, scheduled to be released today, could come in below its expectation as well as market’s.

- Top Glove’s key input latex price has rebounded to RM4.93 per kilogram (up 9 percent from the low in February 2014) on seasonally softer supply, but is still substantially lower than last year’s prices (down 22 percent year-on-year).

- Top Glove’s 2Q14 core net profit could be weaker quarter-on-quarter due to softer sales volume, slight margin compression due to competition, particularly in the nitrile glove segment, and some realised foreign exchange loss as the locked-in rate was below that of spot when the goods were delivered.

Significance: Maybank IB Research maintains “Buy” call on Top Glove with a target price of RM6.20 as it believes Top Glove’s earnings could turn for the better in sequential quarters as the impact of the lower latex price will not be reflected in 2Q14 results. Additionally, Top Glove may recognise some realised foreign exchange gain if the ringgit continues to depreciate against the greenback.