Hot Stock MISC erases gains after rising on oil storage JV stake sale

by **Cals** Mon 24 Aug 2015, 23:17

Hot Stock
MISC erases gains after rising on oil storage JV stake sale

KUALA LUMPUR (Aug 24): MISC Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) erased gains after rising as much as 18 sen or 2.3% on news that the company is selling its 50% stake in VTTI B.V. to Vitol Investment Partnership Ltd for US$830 million (RM3.53 billion). Vitol holds the remaining 50% VTTI stake.
At 10.19am, MISC (fundamental: 1.2; valuation: 0.8) was traded at RM7.98 with 279,700 shares changing hands. The share price gave MISC a market capitalisation of RM35.59 billion.
Earlier, MISC, the fourth-largest gainer across the bourse, had risen to its highest so far today at RM8.17.
Last Friday, MISC said it was selling the 50% VTTI stake, which MISC bought in Sept 2010, for US$882.1 million.
MISC said it planned to use the sale proceeds to repay borrowings, fund capital expenditure, and finance acquisitions.
Today, Kenanga Investment Bank Bhd said MISC was expected to make a disposal gain of some US$9.1 million from the VTTI stake sale.
In a note to clients, Kenanga said the estimated gain was based on the value of MISC’s investment in VTTI.
"We are positive on the move as we concur with the rationale behind the disposal the group cited which was to focus on core business and unlocking the value of investments," said Kenanga, which maintained its "outperform" call on MISC shares with an unchanged target price of RM9.26.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)