Reports » Malaysia

Malaysia stock market and companies daily report (September 04, 2012)

Contributed by Shares Investment

Bandar Raya Hits 4-Year High On Buyout
Bandar Raya Developments (BRDB), rose as much as six percent to RM2.84, its highest level in more than 4 years at the Kuala Lumpur trading after receiving a formal buyout offer from a company led by its chairman. Ambang Sehati in which BRDB’s Chairman owns a 26 percent stake, offered RM2.90 per share for the rest of the developer. The offer price was a 15.4 percent premium to the stock’s five-day average price leading up to 30 July when the indicative takeover price was first announced. Valuation was deemed fair according to one analyst at OSK Investment Bank. The stock was assigned a trading buy call with an estimate price of RM2.98. The shares are predicted to rise by at least 15 percent over the next three months, despite uncertainties at the longer-term outlook.
Significance: BRDB has commercial and residential projects in Kuala Lumpur, Malaysia’s southern state of Johor and in Lahore, Pakistan. Bandar Raya will scrap earlier plans to sell some retail malls after receiving the formal buyout offer. Stock price have gained 33 percent this year, outpacing an 8.1 percent increase in the benchmark FBM KLCI Index.

TNB’s Outlook Stable On Lower Gas Prices
Tenaga Nasional’s (TNB) outlook is deemed stable, signifying company’s ability to uphold its ratings assign by Fitch based on expected developments in accessing to cheap natural gas (NG) from 2013 onwards. The long-term foreign and local currency issuer default ratings (IDRs), along with foreign and local currency senior unsecured ratings for TNB have been affirmed at BBB+. It has also affirmed TNB’s local currency IDRs at F2.Due to NG shortages experienced during the third quarter of FY11, TNB had resorted to using distillates to generate power, a costly alternative over four times the price of subsidised NG. The additional costs were partially covered by a compensation mechanism between the company, Petronas and the Government. TNB has received RM2.39billion in the third quarter of 2012 and is expected to receive additional compensation for the losses incurred during the nine months to May 2012, according to Fitch.
Significance: TNB is the largest electricity utility in Malaysia with RM87billion in assets. A report by The Economist has stated Asian gas prices are likely to fall in the long run and this will add as a positive for TNB. This will encourage the Government to reduce subsidies quickly as current run rates are not sustainable.

Telekom Malaysia’s post 174 percent higher In Q2 Net Profits
Telekom Malaysia (TM)’s net profit for the second quarter ended 30 June jumped more than double to RM348.5 million from RM127.2million a year ago. The increase of 8.6 percent in revenue to RM 2.43billion and 174 percent in net profits was mainly driven by the strong growth in its Unifi broadband subscriptions and recognition of deferred tax assets. The higher net profit boosted by deferred tax income, stemmed from tax incentives given by the government. Earnings per share for the quarter rose to 9.7 sen per share from 3.6 sen. The Telco declared a single-tier dividend of 9.8 sen per share. To date, TM has exceeded its target of 400,000 Unifi customers and expects to hit half a million by year end. The subscriptions reflect a 33 percent take-up of premises passed, a rate which the group hopes will exceed 50 percent by 2015.
Significance: The Company CEO is determined that momentum would pick up for the second half of this year as the company focuses more on investing in its infrastructure services and in its people. The Telco has allocated RM2.6billion capital expenditure this year, of which RM800million has been spent.