Reports » Malaysia

Malaysia stock market and companies daily report (September 24, 2012)

Contributed by Shares Investment

IGB Looking At REITs In Hospitality And Office
IGB Corporation (IGB), is looking at spinning off two more Real Estate Investment Trusts (REITs) within the next five years following the listing of the company’s retail IGB REIT. According to the group managing director, the group is planning to launch a hospitality and office REIT in the future, but currently perceives a more suited market for listing a retail REIT. The listing of the company’s first REIT which is expected to be in September will include two of its most prized mall assets – The Mid Valley Megamall and The Gardens Mall. Currently, both assets are owned by KrisAssets Holdings, in which IGB has a 75 per cent stake and the aforementioned will sell the shopping complexes to the IGB REIT. An estimated 3.4 billion units will be issued under the exercise for the two malls which are valued at RM4.6 billion.
Significance: At present, IGB has 51 percent stake in the trust. Upon the listing, it would provide IGB estimated RM800 million in cash where the proceeds will be used for future expansion both locally and abroad.

MDV Targets RM973m Deals For 2012
The Malaysian Debt Ventures (MDV) is expecting RM973 million worth of deals this year originating from the information communication technology (ICT), biotechnology and green technology industries, according to the company’s managing director and chief executive officer. Currently, RM450 million of the RM973 million target funding has been approved by the Ministry of Finance (MOF). Meanwhile, the chief executive officer of Malaysian Biotechnology Corporation said Malaysia’s biotechnology industry was expected to contribute four percent to the country’s Gross Domestic Product (GDP) and 10 percent to the regional biotechnology market by the end of phase two of its National Biotechnology Policy (NBP). During the second phase, the NBP stands to attract nine billion Ringgit worth of investments in the period from 2011 to 2015.
Significance: MDV is a Venture Financing Organisation, providing contract/project financing facilities to companies within the ICT, biotechnology and green technology industries. During the first phase, the industry has managed to attract RM5.4 billion worth of investments, generate RM13.5 billion in revenue, provided 54,776 jobs opportunities and contributed 2.2 percent to GDP.

CMSB Ups K&N Kenanga Stake
Cahya Mata Sarawak (CMSB) has further increased its stake in K&N Kenanga Holdings after acquiring 25 million shares or a 4.08 percent stake at a price of 85 sen. This brings CMSB’s total direct and indirect stake to 29.64 percent in the company, making it the single largest shareholder of K & N Kenanga, which is mainly involved in stockbroking and investment banking businesses. CMSB said that the purchase of shares in Kenanga would alleviate the impending dilution resulting from the acquisition of ECM Libra Investment Bank Bhd (ECM Libra IB) by Kenanga Investment Bank Bhd (Kenanga IB), a wholly-owned subsidiary of Kenanga. CMSB’s current stake in Kenanga by then will be diluted from 29.64 percent to 24.78 percent upon completion of acquisition. According to CMSB group managing director, CMSB had earlier increased its existing stake in Kenanga via open market and direct business transactions, purchasing 1.13 million shares. This brought up the company’s stake to 25.26 percent.
Significance: K&N Kenanga, via its unit Kenanga IB, is expected to complete acquisition of ECM Libra IB in the fourth quarter of 2012, thus setting it to become Malaysia’s largest independent investment bank. This provides CMSB an investment opportunity to ride the growth of the financial services sector and help expand its businesses outside the state of Sarawak.