Reports » Malaysia
Malaysia stock market and companies daily report (October 15, 2012)
Takeover Offer Recommended To QSR & KFC Holdings Shareholders
Independent advisers are recommending that QSR Brands and KFC Holdings shareholders accept the takeover offer by Massive Equity as the proposed offers are deemed fair and reasonable. AmInvestment Bank, an independent adviser appointed by QSR recommended warrant holders to seize the opportunity of the offer’s premium to historical market price of QSR shares. Meanwhile Affin Investment Bank, the independent advisers appointed by KFC, opined that the KFC warrant scheme is “not fair” based on its evaluation of the quantitative aspects of the offer warrant price of RM1 per KFC warrant, nonetheless was reasonable under the qualitative aspect where no alternative offer exist for the warrants as at the last practicable date. The takeover involves Massive Equity offering RM6.80 a QSR share and RM4 a KFC share. Massive Equity is also offering RM3.79 a QSR warrant and RM1 a KFC warrant.
Significance: Massive equity is a special purpose vehicle which is 51 percent owned by Johor Corporation and the remaining owned by UK-based CVC Capital Partners to privatised QSR Brands and its unit KFC Holdings (M) in a deal valued at more than RM5.24 billion.
Palm Futures May Trade At RM2,300-RM2,400
Crude palm oil (CPO) futures prices are expected to trade between RM2,300 and RM2,400 per tonne on Bursa Malaysia Derivatives this week following the government’s announcement to reduce the export duty for CPO. The government initiative could boost Malaysia’s CPO exports and help ease stockpiles, according to the Senior Palm Oil Trader, Jim Teh. The weaker prices will continue to draw physical buyers into the market, thus adding more stability to the demand, indicated the trader. Last Friday, the Ministry of Plantation Industries and Commodities announced that effectively 31 January 2013, CPO export tax rate will be adjusted between 4.5 percent and 8.5 percent based on prevailing prices and be fixed on a monthly basis for Malaysia to remain competitive. The weekly turnover ended 13 October eased to 203,585 lots from 218,044 lots from its previous week, while open interest increased to 186,164 contracts from 170,213 contracts previously.
Significance: The reduction in export duty on CPO will help the local industry to compete with other exporting countries, especially Indonesia and help support CPO prices which has been falling since the end of August as demand for the commodity was cut back in China and Europe, driving stockpiles to a record high.
New Tables And Optimism Post-US Polls Spur Genting
Genting Malaysia’s New York casino is set to achieve higher earnings as more slot machines are replaced with electronic table games which are 2.5 to three times more yield accretive, said UOB Kay Hian Research. The stock has rallied 7.6 percent since the research house upgraded it to ‘buy’, upon renewed optimism of its bid to benefit from the liberalisation of gaming post the US presidential election where first rounds of amendments had already been passed in March. If approved, New York will have casinos with live table games as early as January 2014. Furthermore, the company’s efforts to push for legalisation of casinos in Miami, Florida are expected to take longer. UOB Kay Hian added that Genting Malaysia is expected to increase earnings as it expands facilities at its flagship Genting Highlands resort to better accommodate its frequent visitors and high rollers.
Significance: Genting Malaysia Share price has been up 10.6 percent since early August. UOB Kay Hian assigned a RM4.05 target price for the stock, which is based on 7.7 times 2013 enterprise value over earnings before interest, tax, depreciation and amortisation.
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