Sept 9th Monday - Stocks To Watch MAS, AirAsia, Kimlun, Kinsteel, MMC, AirAsia X, Compugates

Stocks To Watch MAS, AirAsia, Kimlun, Kinsteel, MMC, AirAsia X, Compugates
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Friday, 06 September 2013 19:57

KUALA LUMPUR (Sept 6): Based on corporate announcements today, the stocks that may catch eyeballs on Monday (Sept 9) could include MAS, AirAsia, Kimlun, Kinsteel, MMC, AirAsia X and Compugates.

MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and budget airline AIRASIA BHD [] intend to defend themselves against allegations they have infringed the Competition Act 2010, that carries a fine of RM10 million for each.

The Malaysia Competition Commission (MyCC) said today MAS and AirAsia have infringed Section 4(2)(b) of the Competition Act 2010, by entering into an agreement aimed at the sharing of markets in the air transport services within Malaysia.

The MyCC decision is premised on an alleged breach by MAS, AirAsia and AirAsia X in entering into a collaboration agreement on August 9, 2011. The routes under scrutiny were the Kuala Lumpur-Kuching, KL-Kota Kinabalu, KL-Sandakan and KL-Sibu routes.

MAS said it plans to submit its written representation and indicated it intends to make an oral representation to the Commission before Oct 18, 2013.

AirAsia said in a separate statement it intends to “vigorously defend” the allegations that it has infringed section 4(2) (b) of the Competitions Act under the collaboration it entered with MAS in August 2011.

Kimlun Corporation Bhd announced that its wholly-owned subsidiary, Kimlun Sdn Bhd, has been awarded two projects worth RM325.5 million.

The details are:

Project 1: CONSTRUCTION [] of service apartments and offices in Puteri Harbour, Nusajaya, Johor Bahru, Johor. Contract sum is RM210 million. Estimated date of completion: March 2016. Customer: Aston Star Sdn Bhd, a subsidiary of UEM SUNRISE BHD [].

Project 2: To undertake earthworks, piling works and structure works for two blocks of commercial buildings in Johor Bahru. Contract sum is RM115.5 million. Date of completion: September 2014. Customer: Wealthy Growth Sdn Bhd, a subsidiary of IOI PROPERTIES [] BHD [].

“The projects are expected to contribute positively to the earnings and net assets of KIMLUN Group for the financial years during the contract period,” said Kimlun in a filing to Bursa Malaysia.

KINSTEEL BHD []’s share may come under pressure again after rating agency MARC downgraded its Islamic debt ratings today on Kinsteel’s RM100 million Murabahah Commercial Papers/Medium Term Notes (CP/MTN) Programme to DID from MARC-4ID/CID.

Kinsteel’s CID rating on RM100 million Murabahah Medium Term Notes (MMTN) Programme remains on MARCWatch Negative.

MARC said the downgrade to default follows Kinsteel’s failure to redeem its outstanding RM40 million Murabahah CP on Sept 5, 2013. The CID rating on Kinsteel’s RM100 million MMTNs denotes a substantial risk of default, it added.

MMC CORPORATION BHD [] announced that its subsidiary Malakoff Corporation Bhd (MCB) has deferred its listing again.

In a filing with Bursa Malaysia, it said: “MMC has been informed by the board of directors of MCB that it has decided to allow the approval of the Securities Commission for the proposed listing, which is valid until Sept 6, to lapse.”

But it added: “However, it remains the intention of the board of MCB to list MCB on the Main Market of Bursa Securities subject to, amongst others, the general market and economic conditions.”

MMC said MCB now intends to submit a new application in relation to the proposed listing to the authorities, after taking into consideration several developments since the deferment of the implementation of the proposals in May 2013.

AirAsia X Bhd., the long-haul budget carrier owned by AirAsia Bhd., is looking to raise yen-denominated funds for the first time as it prepares to take delivery of seven aircraft next year, Bloomberg reported.

The company is in talks with Japanese institutions to finance one or two aircraft it will add to its fleet next year, Azran Osman-Rani, AirAsia X’s chief executive officer, said in an interview in Seoul.

The move is aimed at diversifying the funding to minimize impact from currency volatility, he said.

“Yen is, of course, something we are very interested in,” Azran said. “That’s because 15 percent of our business is in Japan. We have yen receivables.”

AirAsia X raised 988 million ringgit in an initial public offering in June 2013 to help finance its expansion plan.

COMPUGATES HOLDINGS BHD [], which was one of the top actives today, reported that a director had bought substantial amount of shares in the open market.

In its filing with Bursa Malaysia today, it said Goh Kheng Peow had bought a total of 15 million shares from the open market at 5.0 sen and 5.2 sen per share.

In earlier filings, the director had dealt with the share by selling and buying the stock. The latest filing shows the company incurred losses.