Reports » Malaysia

Malaysia stock market and companies daily report (October 09, 2012)

Hua Yang Plans RM1.52b Mixed Development in Puchong
Hua Yang had entered into a conditional sale and purchase agreement with Mentari Hari to acquire five vacant plots of leasehold land totalling 29.2 acres in Puchong, Selangor. The developer intends to construct a mixed development with an expected gross development value of RM1.52 billion that comprises serviced apartments and offices/lifestyle studio offices suites together with parking facilities, clubhouse and amenities. The purchase consideration of RM 158 million is said to be funded via internally-generated funds and bank borrowings. Furthermore, gross development cost is expected to be RM1.22 billion with gross development profit approximately at RM300 million. According to Hua Yang, the company is targeting the younger generation of the surrounding matured residential areas through the concept of affordable priced properties while maintaining the modern and city life. The proposed development is expected to launched at the end of 2014 with development tenure of six to eight years.
Significance: The acquisition is in line with company’s plans to further expand current land bank of 309.989 hectares with an estimated GDV of RM2.2 billion for future property development.

Palm Oil Drops For The First Time In Four Days
Palm oil prices fell for the first time in four days on over concerns that stockpiles in Malaysia reached a new level record. The contract for December delivery fell 2 percent to close at RM2,368 metric tonne on the Malaysia Derivatives Exchange. Palm oil has declined 22 percent since the end of August due to weakening demand amidst global slowdown. Based on median of estimates from five analysts and two plantation companies, stock piles in Malaysia may have rose 15 percent to a record 2.43 million tonnes in September from 2.12 million tons in August,. Malaysia’s output in September climbed 10 percent to 1.83 million tonnes from 1.66 million tonnes the previous month, while exports rose 4.9 percent to 1.5 million tons from 1.43 million tons, the survey showed.
Significance: The Malaysian Cabinet may possibly discuss changes on palm oil export tax structure this Friday and maybe limiting plantation expansion to support falling prices.

Semperit Bids Latexx Partners For $196m
Semperit AG, Europe’s biggest maker of rubber medical gloves, is bidding as much as RM603 million (US$196 million) to buy Malaysian competitor Latexx Partners. The Vienna based company has agreed to buy shares and warrants held by Latexx shareholders including Chief Executive Officer Low Bok Tek for RM275 million. The offer price given stood at RM 2.30 per share and all warrants for RM1.77, representing a premium of 29 percent to the shares’ closing price on 5 October. The purchase is stated to be financed with cash and new debt and is subject to antitrust approval in Austria and Germany, the company said. It is noted that the acquisition may transform Semperit into the world’s second-biggest maker of medical gloves from its current position of fourth-biggest. The deal is expected to be clinched this quarter and will enhance earnings from 2013 onwards.
Significance: It is noted that Semperit has already gained over 47 percent acceptance from key shareholders, indicating a promising deal. Furthermore, company’s CEO who had agreed to sell his entire 29.3 percent stake in the company and 35 million warrants will stay on at Latexx to assist with the integration process.