July 29th - Stocks To Watch Genting M’sia, Bursa, Kinsteel, Perwaja, Ta Ann, Power Root, Coastal Contracts

Stocks To Watch Genting M’sia, Bursa, Kinsteel, Perwaja, Ta Ann, Power Root, Coastal Contracts
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Friday, 26 July 2013 19:34

KUALA LUMPUR (July 26): Based on news flow and corporate filings to the stock exchange today, stocks that mKUALA LUMPUR (July 26): Based on news flow and corporate filings to the stock exchange today, stocks that may attract interest on Monday (July 29) could include Genting Malaysia, Bursa Malaysia, Kinsteel, Perwaja, Ta Ann, Power Root and Coastal Contracts.

Genting Malaysia Bhd expects to spend at least 3 billion ringgit ($937 million) over five years to revamp the country’s sole casino resort and will tie up with 21st Century Fox Inc. on a theme park to attract more visitors.

Genting will add 1,300 rooms at the Malaysia resort, Chairman and Chief Executive Officer Lim Kok Thay told reporters in Kuala Lumpur today.

It will spend 400 million ringgit to open the refurbished theme park with Fox, reported Bloomberg.

Genting Malaysia is revamping the theme park while pushing to diversify earnings outside its home market.

The revamped park will feature some of the brands from Fox films including the Ice Age, Rio, Alien and Night at the Museum. It will cover 25 acres and feature more than 25 rides and attractions, the company said.

The redeveloped project will open in 2016.

"This landmark development is our first response to the growing demand for theme parks with a cinematic nature,” Lim said, adding Genting will use internal funds for initial investment and may tap the market for cheaper financing.

BURSA MALAYSIA BHD []'s senior official said Bursa Malaysia Derivatives (BMD) ended yesterday with two new historical record highs.

Open Interest (OI) for all products hit a new high of 251,994 contracts at market close yesterday whilst crude palm oil (CPO) futures saw 201,209 contracts remaining open at the end of the day.

"The growing open interest is a reflection of BMD's growing strength. This positive development is indicative of an elevated confidence in our derivatives market as well as interest in hedging the cash exposure using futures instruments by institutions," BMD’s Chief Executive Officer Chong Kim Seng, Bernama reported.

Chong said the OI for all products and palm oil futures contracts on BMD have been consistently rising.

All contracts saw a rise of 18 per cent to 251,994 in the first seven months of 2013.

Open interest reflects investors' position in the futures exchange, hedged against their other exposures and positions in the physical markets.

Perwaja Holdings Bhd and KINSTEEL BHD [] plan to pay off all their maturing bonds with bank financing, said the company’s CEO Datuk Henry Pheng in an interview with theedgemalaysia.com.

“We are finalising a new facility with a foreign bank in Malaysia.

“This facility is enough to cover current bond and future bond payments, as well as for our working capital needed for Perwaja’s concentration and pelleting plant. It’ll be substantial and enough to cover all. There will be no question of default in payment,” said Pheng.

Perwaja Steel Sdn Bhd, a subsidiary of Perwaja, has to meet a RM50 million repayment on September 25 on its RM110.0 million outstanding Murabahah Medium Term Notes (MMTN).

And the market is doubting whether Perwaja could fulfil its immediate debt obligations after its parent company, Kinsteel Bhd, missed a July 6 deadline to increase its FRSA reserve service account by RM5 million.

On July 15, MARC also placed two of Kinsteel’s debt papers on MARC Watch Negative.

The steel miller has a RM100 million Murabahah Commercial Papers/Medium Term Notes (CP/MTN) programme and RM100 million Murabahah medium term notes (MTN) programme.

On July 18, shares of Kinsteel plunged to all-time low of 26 sen following a “sell” call by MIDF Research, which slashed Kinsteel’s target price to 26 sen from 41 sen per share. But Kinsteel shares recouped their losses after the company announced early this week it has secured mining rights in Pahang.

Apart from talking about debts of Kinsteel and Perwaja, Henry Pheng and his father Tan Sri Pheng Yin Huah also spoke to the Edge about their plans to turn around Perwaja. They also revealed future strategic plans for Kinsteel and its earnings outlook. All doubts raised by the market were also answered.

The full interview and write-up will appear in the Edge Weekly tomorrow (July 27).

TA ANN HOLDINGS BHD [] said its Tasmanian unit, Ta Ann Tasmania Pty Ltd, has received a letter from the Tasmanian Government offering funding for its plywood mill project there.

In its filing to Bursa Malaysia today, Ta Ann said the plywood mill project has been included as a funded project for A$7.5 million in the A$100 million economic diversification projects.

Ta Ann is a timber and PLANTATION [] company in Sarawak.

Power Root Bhd, a beverage products manufacturer, is diversifying into movie production and distribution.

This comes under a joint venture with several firms including tycoon Robert Kuok's PPB GROUP BHD [] [ ]’s wholly-owned unit Golden Screen Cinemas Sdn Bhd (GSC), Power Root told Bursa Malaysia today.

Power Root said it has signed a shareholders’ agreement with Clover Films Pte Ltd, GSC and Verygood Movie (M) Sdn Bhd.

Under the agreement, Power Root has subscribed to 51% equity interest in Medan Multimedia Sdn Bhd (MMSB) for RM15,300.

Clover, GSC and Verygood owns 20%, 19% and 10% respectively in MMSB.

Power Root said : "MMSB is principally engaged in the business of production, distribution, exhibition and marketing of movies. MMSB will be a subsidiary company of Power Root."

COASTAL CONTRACTS BHD [] has secured orders for seven offshore support vessels (OSV) with an estimated combined value of RM425 million.

The ship builder said the seven OSVs comprise five units of anchor handling tug supply vessels, one unit of 300-men accommodation work barge and a sub-sea support/maintenance vessel.

"Among the seven OSVs, five vessels were sold to new customers from South East Asia and Africa, whereas two vessels were sold to regular customers," Coastal Contracts said.

The firm said the vessels to support oil and gas operations are scheduled for delivery during 2013 and 2014.

"The revenue stream from these vessels is expected to contribute positively to the top and bottom line performance of the group for the financial years ending 31 December 2013 and 31 December 2014."