Reports » Malaysia

Malaysia stock market and companies daily report (November 01, 2012)

Contributed by Shares Investment

No Loses Made Despite Fall Of Astro Warrant Price
It’s been pointed out by warrant traders that investors did not lose any money from the seemingly poor performance of Astro’s call warrants which were listed this week. This was due to the downward adjustments made by the issuers to reflect the underperformance of its mothers share, according to a warrants specialist. “These instruments were not placed out to investors prior to their listing. They were only sold to investors on the day they were listed, and at prices that had already been revised downwards,” he said. Seven of the 10 structured warrants that debuted on the Monday, 29 October had their prices revised lower by as much as 80 percent from their initial reference price of 15 sen a piece upon listing. On the following day, the remaining three warrants had their prices revised downwards. They were Astro-CC (down nine sen to six sen), Astro-CD (down 12 sen to three sen) and Astro-CF (down 10 sen to five sen).
Significance: According to an AmInvestment Bank director and head of equity derivatives, the reference price serves only as an indicative and generally, the issuance of 15 sen a piece for all new warrants would be the minimum price for Astro. However, none were sold at that initial reference price of 15 sen, as all the warrants were issued via “direct listing’.

Manulife Deem Private Retirement Scheme Potentially Worth RM18b
Manulife Asset Management Services believes Malaysia’s private retirement industry could be worth around RM18 billion and help create 2,200 new jobs. The asset management company expects the new private retirement landscape to create an incremental Gross National Income (GNI) of RM2.1 billion in the financial services sector. Through the transferring of skill and technology required to launch the private retirement scheme, the industry will potentially be worth some RM18 billion. The CEO Edward Ooi said the estimation was based on the six million employees and two million self-employed adults in the country. Pension reforms were taking place aggressively in ASEAN countries to address rapidly aging demographics and ever-rising pension costs, hence, a simple and efficient product delivery system was very crucial for a successful pension scheme, he added.
Significance: Manulife believes this market represents a huge business opportunity and the company will recruit and train new talent as well as introduce technology from Manulife Financials’ worldwide pension operations at the local level.

TH Heavy Falls Despite Good News Over PN17
TH Heavy Engineering, formerly known as Ramunia Holdings, and its warrants fell yesterday following the positive news that the company has been removed from the PN17 classification effective yesterday. TH Heavy dropped 2.5 sen to close at RM0.59 on 55 million shares traded whereas its warrants, which has been rising in the past 10 trading days; fell 3.5 sen to close at RM0.42. Bursa Malaysia had relieved the company from the PN17 classification after TH Heavy had regularised its financial condition. Two years ago, the company fell into PN17 classification upon selling its core business to Sime Darby. TH Heavy registered earnings of RM4 million on revenue of RM46.6 million in the third quarter of 2012 compared with zero profit and revenue in the preceding quarter last year. Currently the net value of the stock is around 30 sen with PE ratio of 148 times.
Significance: TH Heavy’s performance has always been a typical case of buying on rumour, selling on confirmation of good news, as it is still considered a highly speculative stock, even after the completion of its regularisation plan.